Chevron will pay off between 15% and 20% of its global workforce as it seeks to reduce costs after the mega deal that will see it combine with Hess Corporation as soon as the complications around the deal are resolved.
The job cuts will also help Chevron simplify its business model, vice chairman Mark Nelson told media in a statement. The layoffs will take place by the end of next year.
With a total workforce of over 40,000, the 20% job cull would affect some 8,000 people.
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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 by Reuters, this week. “We do not take these actions lightly and will support our employees through the transition.”
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In addition to the hefty price tag of the Hess Corporation 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.
