Chevron, the second-largest U.S. oil and natural gas company after ExxonMobil, told employees on Wednesday that it would lay off 15% to 20% of its workforce over the next two years. About 6,000 to 8,000 of Chevron’s global employees will be impacted.
The layoffs contribute to Chevron’s larger goal of cutting costs by up to $3 billion before the end of 2026, per Barron’s. At the end of 2023, Chevron employed about 46,000 people worldwide, including 40,212 people across its operations and 5,400 people at service stations. The layoffs will only affect employees in operations, per Reuters, and impact employees across the world including in the U.S. where over half of Chevron’s workforce is based.
“Chevron is taking action to simplify our organizational structure, execute faster and more effectively, and position the company for stronger long-term competitiveness,” Chevron vice chairman Mark Nelson said in a statement to various news outlets.
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A source told Reuters that Chevron employees can opt for a buyout of undisclosed value or resign in exchange for a severance package from now through April or May. Chevron reportedly informed its workers of the option in an internal town hall.
Chevron CEO Michael Wirth. Photo by Apu Gomes/Getty Images
Companies like Chevron are also producing oil more efficiently than ever, reducing the need for workers. Barron’s reports that the U.S. produced 60% more oil per day over the past decade while employing 40% fewer workers.
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Chevron reported its first loss in four years last month, causing the company’s stock to fall by 3.9% the day it reported earnings. Chevron’s downstream business, which refines crude oil into products like gasoline, lost $248 million in the fourth quarter of 2024 compared to a profit of $1.15 billion in the fourth quarter of 2023.
CNBC reports that lower profits on fuel sales could be due to declining demand after a post-pandemic surge in the U.S. and China, the largest oil consumers. Chevron wrote in its earnings statement that diminished profits were due to lower margins on sales of refined products, like gasoline, and higher operating expenses.
Chevron has also faced production challenges recently as its reserves, or the amount of oil and gas it can extract, have dipped to their lowest point in over a decade. Chevron’s reserves have decreased from 11.1 billion barrels of oil equivalent by the end of 2023 to 9.8 billion in 2024.
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