Chevron to cut up to 7000 jobs amid oil slump
It did so for the first time in July, when as we reported at the time, Chevron would layoff 1,500 jobs globally, saying that “the cost reductions due to cuts in the corporate center are expected to total $1 billion with additional cost savings expected across the company”.
Segment-wise, upstream operations – or exploration and production-related activities – crawled to a net profit of $59 million after posting a net loss of $2.2 billion in the second quarter. It posted profit of $4.24 billion, or $1.01 per share, compared with $8.07 billion, or $1.89 per share in the same quarter a year earlier.
The company said it was expecting to slash its spending again in both 2017 and 2018 by between $20 billion and $25 billion.
Chevron, another integrated oil major, also beat market expectations in the third quarter, though its profits did still fall by 64%.
Exxon’s headcount peaked in 1989 at 104,000 and dropped steadily for the next decade to 79,000 in 1998, the year before it bought Mobil Corp.in the biggest-ever energy deal.
Chevron Corp. (NYSE: CVX) reported third-quarter 2015 results before markets opened Friday.
Only 10 percent of non-shale discoveries this year will be profitable, down from 40 percent in 2010, said Julie Wilson, a senior exploration analyst at Wood Mackenzie. Since Exxon and Mobil merged in 1999 the combined firm has cut its workforce by 30%, but this time it announced neither any further job losses nor any cut in its capital spending.
“The grim reality is, when you have oil prices in the 40s…it’s tough sledding”, Watson said Friday.
Production fell 1 percent to 2.5 million barrels of oil equivalent per day.
Analysts were expecting that revenue come in at $29.76 billion, with earnings per share of 76 cents. Crude oil and natural gas liquids prices were $42 versus $87 a year ago.
“It’s not only the falling price of oil and the oversupply of oil, but it’s also the falling demand for oil in China and in other parts of the US”. Profits of the company too tumbled in the third quarter. “Chevron is taking actions responsive to the current price environment”, said Kurt Glaubitz, a company spokesman.
As a result of a buying spree that began in early 2014, the company now controls drilling rights to 1.5 million acres in the Permian formation beneath Texas and New Mexico, more than twice the size of its holdings in Iraq or the UK sector of the North Sea.
Despite the drop in oil prices, Chevron’s CEO John Watson has said he would stick to plans to increase production by 20 percent by the end of 2017.