Chevron Corp. (NYSE:CVX) has announced that it will lay off 15-20% of its global workforce and reorganize its business structure. The U.S. oil and gas major announced that it will consolidate its Oil, Products & Gas segment into Upstream and Downstream, Midstream & Chemicals segment, and be led by Mark Nelson, the current executive vice president of the Oil, Products & Gas unit.
“Our new organizational structure and leadership appointments are designed to improve our operational efficiency and position Chevron for sustained growth,” CEO Mike Wirth said in a statement.
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The mass layoffs are part of the company’s efforts to cut costs. Last month, Chevron announced that it’s well positioned to grow its free cash flow by $6 billion to $8 billion by 2026, and lower expenses by “a couple billion dollars”. America’s second-largest oil and gas company expects to achieve these results thanks to the start of new or expanded oil production projects in Kazakhstan, growth in U.S. shale and offshore U.S. Gulf of Mexico.
Chevron has projected oil production growth in the Gulf of Mexico to clock in at 300,000 barrels per day by 2026, up from 200,000 last year. Back in August, Chevron produced its first oil from a pioneering U.S. Gulf of Mexico deepwater field under extreme pressures. The field is expected to produce up to 75,000 barrels of oil per day at its peak, with the company lining up two more offshore projects.
Meanwhile, Chevron is looking to close the gap between it and Exxon Mobil Corp. (NYSE:XOM) through the acquisition of Hess Corp. (NYSE:HES). Last month, the Federal Trade Commission (FTC) finalized a consent order that resolves antitrust concerns surrounding Chevron Corporation’s acquisition of oil producer Hess Corporation. Hess CEO John Hess said he’s “very confident” that the company’s planned $53 billion sale to Chevron will be completed.
“We’re very confident that the merger is going to go through and we’re getting prepared for that,” Hess said at the Goldman Sachs Global Energy, Clean Technologies & Utilities Conference.
By Alex Kimani for Oilprice.com
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