On May 27, Chevron, the second-largest crude oil producer in the United States, said it planned to lay off 10% to 15% of the world as part of an ongoing restructuring. Chevron currently has approximately 45,000 employees worldwide. The number of layoffs may be between 4500 and 6750, which will also be the largest layoff of the oil giants since the global outbreak in 2020.
// The announced layoffs of oil companies ///
In May, Shell Petroleum proposed measures for employees to voluntarily resign, and may further layoffs in the second half of the year.
In May, Halliburton laid off 1,000 people at its Houston headquarters, and layoffs worldwide.
In April, Schlumberger planned to temporarily leave employees and initiate layoffs and company reforms.
In April, Weatherford proposed to lay off 6,000 people.
In March, Exxon Mobil cut about 1,800 people.
In March, Halliburton laid off 600 people in the United States.
In January, Apache Petroleum laid off 270 people.
In January, Western Petroleum initiated large-scale layoffs.
Chevron said in a statement that it is working to streamline its organizational structure to reflect efficiency and meet the expected level of prosperity. Chevron Chief Financial Officer Briebel said that the layoffs will be comprehensive, and oil field workers may also be affected, because falling oil prices mean that the level of activity for mining is reduced. About half of Chevron is in the United States.
Low oil and gas prices and poor performance are the main factors for layoffs
In 2019, the performance of several major international oil and gas giants declined collectively. One of the common reasons behind this is that crude oil prices, especially natural gas prices, have been hovering at a low level compared with previous years. Chevron had the largest decline, at 80%.
According to Chevron's 2019 fourth quarter and full-year performance data, the company achieved a net profit of US $ 2.924 billion in 2019, which was an 80% decline from 2018's US $ 14.824 billion.
Faced with low oil prices and low natural gas prices, Chevron is struggling under the pressure of weak shareholder earnings and huge operating costs.
In March this year, Saudi Arabia and Russia launched an oil price war. The international crude oil prices continued to fall, coupled with the impact of the new crown epidemic, WTI crude oil prices continued to be low, and even once fell to a negative value. Although the international oil price rebounded obviously in May, it was still below US $ 40 / barrel, and the major oil and gas companies continued to "tighten their clothes".
At the current WTI crude oil price level of around US $ 30, most oil and gas projects in the world will fall into an unprofitable situation. It is true that the "darkest moment" of the oil and gas industry requires adjustments by oil companies.
Major adjustments or major layoffs
Shale oil is currently uncompetitive at current oil prices, and Chevron has cut its spending in the Permian Basin, the largest shale gas field in the United States, by half. It is expected that by the end of this year, the daily oil and gas production reduction in the Permian Basin will be reduced by about 125,000 barrels, a 20% reduction from its daily target of 600,000 barrels.
At the same time, the divestiture of non-core assets is also one of Chevron's strategies to deal with the current low oil prices. On April 16, Chevron sold its energy assets in Azerbaijan to MOL Hungarian Oil and Gas for $ 1.57 billion.
In addition, the memo seen by Joseph Geagea, Chevron's executive vice president, shows that the next round of restructuring plans will take place in June. Chevron's technology, product and service business restructuring may be completed by the end of October.
Source: Mobei Public Account
