Chevron is planning a substantial reduction in its workforce, affecting thousands of employees. The decision comes as the energy company aims to streamline operations and improve efficiency. The move reflects Chevron’s strategy to manage expenses while adapting to industry challenges. The layoffs will be part of a broader effort to cut structural costs and improve long-term competitiveness.
Chevron has previously undertaken workforce reductions as part of its cost-cutting strategies. In past years, the company implemented similar measures in response to market fluctuations and economic conditions. These efforts reflect an ongoing strategy to maintain financial stability while navigating changes in global energy demand. The latest job cuts continue this trend, reinforcing Chevron’s focus on operational efficiency.
How Many Jobs Will Be Affected?
Chevron plans to lay off between 15% and 20% of its workforce, according to Vice Chair Mark Nelson. The company had more than 40,200 non-service station employees and nearly 5,400 service station workers at the end of 2023. The layoffs are expected to be completed mostly by the end of 2025. Nelson stated that the cuts are necessary to simplify the organizational structure and improve long-term competitiveness.
What Are Chevron’s Cost-Saving Goals?
The company aims to reduce structural costs by $2-$3 billion by 2027. Chevron has been working toward this target since at least November, when Chief Financial Officer Eimear Bonner mentioned it during the third-quarter earnings report. The company is also focusing on optimizing its portfolio and using technology to enhance productivity. These efforts include expanding the use of global centers and changing how work is performed.
“We do not take these actions lightly and will support our employees through the transition. But responsible leadership requires taking these steps to improve the long-term competitiveness of our company for our people, our shareholders, and our communities,” Nelson said.
Chevron’s recent financial performance provides context for these decisions. The company reported total revenues of $52.2 billion and net income of $3.24 billion for the fourth quarter of 2023. For the full year, it earned $202.79 billion in revenue and $17.66 billion in net income, marking a 17.35% decrease in profit from the previous year. Despite the decline, global net oil-equivalent production increased by 7%.
“We are in a strong position today, with near-term catalysts that are expected to drive the company to even better performance in 2025 and 2026,” CEO Mike Wirth said.
Chevron continues to adjust its operations in response to market conditions. The company’s restructuring efforts align with broader industry trends, where energy firms focus on cost reductions and operational improvements. These changes could affect employees, shareholders, and energy markets, influencing how the company competes in the coming years.
