Oil Price Slump Leading Chevron to Cut Up to 7,000 Jobs

SAN RAMON, Calif. — Lower oil prices will force Chevron Corp. to cut between 6,000 and 7,000 jobs — approximately 11 percent of its workforce — Chairman and CEO John Watson stated during the company’s 2015 fiscal third-quarter earnings call Friday.

“We expect capital and exploratory expenditures for 2016 to be $25-28 billion, roughly 25 percent lower than this year’s budget,” Watson said. “We expect further reductions in spending for 2017 and 2018, to the $20- to $24-billion range, depending on business conditions at the time. With the lower investment, we anticipate reducing our employee workforce by 6,000–7,000.”

Chevron’s 2015 fiscal third-quarter earnings dropped significantly, coming in at a net profit of $2 billion for the three-month period ended Sept. 30. This compares to a net profit of $5.6 billion in the year-ago period.

Sales and other operating revenues also declined by $19 billion, to $33 billion.

“Third-quarter earnings were down substantially from a year ago,” said Watson. “While downstream earnings remained strong, lower overall earnings reflected weaker market prices for both crude oil and natural gas, which depressed upstream profitability. We are focused on improving results by changing outcomes within our control.”

Although upstream earnings were particularly hurt by oil prices, Chevron did find strength in its downstream division. U.S. downstream earnings rose $440 million year over year to $1.249 billion in Chevron’s 2015 third quarter.

Shares of Chevron Corp. were slightly up on the New York Stock Exchange in Friday morning trade, but the company’s stock is down nearly 20 percent year to date.