Chevron Set to Lay Off 20% of Global Workforce

Chevron will pay off between 15% and 20% of its global workforce as it seeks to reduce costs after the megadeal that will see it combine with Hess Corp.—as soon as the complications around the deal are resolved.

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Earlier, Chevron estimated its cost-cutting needs at some $3 billion following the $53-billion acquisition of Hess Corp., which has run into an obstacle in the form of Exxon’s demand for compliance with a right of first refusal clause in its partnership deal with Hess on Guyana oil. Exxon insists the clause must be observed while Hess—and Chevron—argue it only concerns asset sales and not complete takeovers, which is what Chevron has agreed to do with Hess.

“Chevron is taking action to simplify our organizational structure, execute faster and more effectively, and position the company for stronger long-term competitiveness,” Nelson said, as quoted by Reuters, this week. “We do not take these actions lightly and will support our employees through the transition.”

In addition to the hefty price tag of the Hess Corp. acquisition, Chevron has also suffered weaker refining margins that dragged its overall financial results down in the fourth quarter of last year. These weak margins led to Chevron’s first quarterly refining loss since 2020, with impairment charges and higher operating costs contributing to the disappointing result.

“I’m not going to call it the perfect storm, but it was a quarter where there were a lot of things that all went in one direction, and it was a negative direction,” chief executive Mike Wirth said during the company’s fourth-quarter earnings call.

By Irina Slav for Oilprice.com

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