Chevron to lay off up to 20% of its workforce

The vice president of Chevron, Mark Nelson, announced that the company will lay off up to 20% of its workforce. The executive said the decision is part of the oil giant's plan to "simplify" the organizational structure, "execute more quickly and efficiently and put the company in a more competitive position for the long term."

In an email forwarded to The Hill, Nelson said that this process "includes optimizing the portfolio, leveraging technology to improve productivity and changing how and where work is done, including expanded use of global centers."

"Unlocking new growth potential"

The oil company's vice chairman is convinced that "changes to the organizational structure will improve standardization, centralization, efficiency and results, unlocking new growth potential and helping Chevron drive industry-leading performance now and in the future."

Nelson estimated that the new plan's "actions" could lead to cutting 15-20% of the current workforce. This reduction will occur in several phases, starting this year, with most layoffs expected to take place before the end of 2026. As of October 2023, the company employed approximately 45,511 people across 51 countries.

Uncertainty in the fossil energy market

Chevron's announcement comes during a period of uncertainty for the fossil fuel industry. While Donald Trump's arrival at the White House is seen as a potential lifeline for the sector, offering a counterbalance to Joe Biden's aggressive green agenda, the global shift toward renewable energy policies puts the financial stability of oil companies at risk.

Additionally, the instability in the Middle East, driven by Israel's war in Gaza, presents a further challenge for oil and gas companies. Chevron's CEO, Michael Wirth, warned last January that Houthi attacks on commercial ships in the Red Sea posed "very real" risks to both oil flows and prices.

First quarterly losses since 2022

Chevron's announcement follows the company's first quarterly loss since 2022, with its stock price dropping 3.9% in January. In 2022, the oil giant posted a record profit of $35.5 billion. However, in 2023, its profit fell to $21.4 billion, a 40% decline, and dropped another 17.3% in the following year, totaling $17.7 billion.