Chevron Announces Global Workforce Reduction of Up to 20%
HOUSTON, Texas - At an internal town hall meeting, approximately 40,000 Chevron employees were presented with a video highlighting the company's success as Colorado's leading oil and gas producer. However, within 30 minutes, executives unveiled plans to reduce the global workforce by up to 20%.
During the February 12th meeting, company leaders acknowledged Chevron's progress in safety and financial performance, but noted the need for improvement. They cited complexity, increasing costs, and slow decision-making as areas where Chevron had fallen behind competitors.
The workforce reduction, which could affect up to 8,000 employees, comes amidst lower oil prices and refining margins compared to the previous year. Despite this, Chevron anticipates a 2024 profit of $18.3 billion, down from $24.7 billion in 2023.
The layoffs mark a challenging period for Chevron, the second-largest U.S. oil producer. In October 2023, the company acquired New York-based Hess for $53 billion to gain access to Guyana's profitable oilfields. However, the deal has been challenged by Exxon Mobil and CNOOC, Hess' partners in Guyana, resulting in its postponement pending arbitration.
Chevron employees expressed mixed reactions, with some acknowledging the necessity of the move to remain competitive. The company aims to cut up to $3 billion in costs by 2026 through operational improvements.
"While these changes are necessary, the decision to reduce our workforce is not an easy one," said a Chevron spokesperson.
Other oil majors, such as Shell and BP, have also implemented workforce reductions in recent months. The layoffs in the industry typically follow periods of declining oil prices, but Chevron's announcement comes during relative price stability, which has raised concerns among employees.
Chevron's vice president of the Rockies business unit, Kim McHugh, addressed employee concerns about accountability during the town hall. CEO Mike Wirth emphasized the importance of action, transparency, and holding individuals accountable for decision-making.
Amidst previous reorganizations, employees seek assurance that this latest restructuring will be successful. "Let's make sure this time that you pick the people and stuff to make this work, so that we don't have to go through this again," McHugh said to Wirth.