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Tuesday, January 19, 2021

Chevron’s cost-reduction measure may eliminate up to 15% of workforce

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(Bloomberg) –Chevron is planning a 10% to 15% reduction in its global workforce this year, the biggest cut to headcount yet among global oil majors following the Covid-19 pandemic.

The company aims to reduce costs to ride out the worst crude-price crash in a generation. Among other big oil companies, BP Plc is reducing senior management roles ahead of a further announcement in June, while Royal Dutch Shell Plc is offering voluntary redundancies. Exxon Mobil Corp. has said it intends to cut operating costs by 15%, not including layoffs.

Chevron’s cuts equate to about 6,000 of its 45,000 non-gas station employees. It’s “streamlining our organizational structures to reflect the efficiencies and match projected activity levels,” the San Ramon, California-based company said Wednesday in a statement. “This is a difficult decision, and we do not make it lightly.”

Chevron plans to strip $1 billion of operating expenses this year in addition to slashing capital spending by almost a third. Even before the pandemic, Chief Executive Officer Mike Wirth was leading a cost-cutting drive.

Job reductions will be “across the board but heavy on the corporate functions and the support functions,” Chief Financial Officer Pierre Breber said in a May 1 interview. But field workers may also be affected because lower oil prices mean “lower activity levels,” he said.

Bloomberg – Kevin Crowley

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