Chevron to shed 2,000 jobs
Chevron Corporation, the second largest U.S. oil company, announced on Tuesday that it would cut 2,000 jobs this year amid challenging market conditions.
The company said the cuts come as a part of its plans to boost earnings by lowering costs, exiting unprofitable markets, and streamlining its business.
“Market conditions are likely to be difficult for the next several years,” said Mike Wirth, executive vice president of Global Downstream division division in a statement.
As it concentrates more on extracting oil and gas, Chevron is targeting 1 percent annual net production growth through 2014, before growing by between 4 percent and 5 percent in the three years after that.
Lloyd Avram, a Chevron (CVX, Fortune 500) spokesperson, told the Press that the cuts will come from areas including refining and marketing, and are a part of a larger restructuring effort.
Avram anticipates the new organizational structure will be in place by the third quarter.
The announcement comes as Chevron and its competitors face a tough economic environment, with lower oil prices and relatively low demand.
In January, Chevron reported fourth quarter earnings of $3.07 billion, which were down 39% from the prior year period.
The company said it plans to concentrate on its North American and Asia-Pacific markets, where it says it has a competitive advantage.
It also said that even after eliminating 2,000 positions in 2010, it will continue to cut jobs through 2011.
Chevron expects to take a first quarter charge of $150 million to $200 million, in order to pay out severance packages.
Chevron will further concentrate its refining and marketing–or downstream–portfolio in North America and Asia Pacific. It will solicit bids for certain operations in Europe, the Caribbean and Central America, and review operations in Hawaii and Africa, outside South Africa.
