In order to simplify its structure and improve agility for long-term growth, Chevron has announced significant job cuts. The company is preparing to cut 20 per cent of the workforce by the end of 2026.
Despite the cuts, Chevron anticipates a six per cent annual growth in production over the next two years. This increase is driven by new wells in countries such as Kazakhstan. However, the company has scaled back its capital spending to align with its cost-cutting goals.
The workforce reductions will begin this year and continue through 2026. Around 5,000 of Chevron’s 2023 employees worked at service stations. The company has pledged to support employees through the transition as it works to improve competitiveness and shareholder value.
The oil giant employed over 45,000 people at the end of 2023, with nearly half based in the US.
Chevron has not disclosed which regions or divisions will be most affected by the layoffs.
Last month, Chevron outlined plans to sell some assets and increase automation, including expanding the use of robots. These initiatives are expected to help the company achieve $2 to $3 billion in savings.
Chevron’s efforts to acquire oil producer Hess have faced challenges due to an ongoing legal battle with rival Exxon. Meanwhile, employment in the US oil and gas sector has declined sharply over the past decade, despite production having expanded.
The oil industry has seen a wave of mergers in recent years, as companies seek to avoid past mistakes of overexpanding and flooding the market with supply. Chevron’s restructuring is clearly an attempt at focussing on efficiency rather than rapid growth.
