Chevron will reduce its global workforce by 15% to 20% by the end of 2026 as part of a broader strategy to streamline operations and reduce costs.
The decision follows operational challenges, rising project expenses, and a pending $53bn acquisition of Hess, which was announced in October 2023.
Chevron had a workforce of over 40,000 people at the end of 2023, across its global operations, reported Reuters. A 20% workforce reduction would translate to approximately 8,000 positions, excluding the 5,400 employees working at Chevron service stations.
The US-based oil and gas company has outlined a plan to achieve up to $3bn in cost reductions by 2026, leveraging technology, asset divestments, and organisational restructuring.
Chevron continues to face operational and financial hurdles, including rising costs and project delays at its Tengiz oilfield in Kazakhstan, where the company has been working to expand production. The project, one of its most significant upstream investments, has encountered budget overruns and timeline setbacks, contributing to broader cost-cutting pressures.
At the same time, Chevron’s acquisition of Hess remains in legal uncertainty. This is because of ExxonMobil disputing Hess’s ability to transfer its 30% stake in Guyana’s Stabroek oil block.
ExxonMobil, which operates and holds a 45% share in the offshore field, has argued that it retains preemptive rights over any sale, delaying Chevron’s efforts to expand its presence in one of the world’s most promising oil regions.
Chevron vice chairman Mark Nelson, has been quoted by the news agency, as saying: “Chevron is taking action to simplify our organizational structure, execute faster and more effectively, and position the company for stronger long-term competitiveness. We do not take these actions lightly and will support our employees through the transition.”
According to a source having knowledge with the matter, Chevron has informed employees that voluntary buyout options will be available until April or May. The company is also expected to announce a revised leadership structure within two weeks as part of its reorganisation.
Towards the end of last month, Chevron released the financial results for Q4 2024, which reflected the impact of weak refining margins, as gasoline and diesel profitability declined.
The refining segment posted a quarterly loss, marking its first negative performance since 2020. Chevron reported $3.2bn in net income for Q4 2024, up from $2.3bn in the same period the previous year. The results included $715m in severance charges and $400m in impairment costs, while foreign currency adjustments contributed $722m to earnings.
On an adjusted basis, earnings for the quarter totalled $3.6bn, down from $6.5bn in Q4 2023.
