Chevron, the second-largest U.S. oil and gas company, said on Wednesday that it would lay off as much as 20 percent of its work force, or up to around 9,000 people, as part of a cost-cutting effort.
While the cuts are deeper than at other oil companies, they are in keeping with a broad trend of layoffs at oil and gas companies as they contend with lower oil prices. After enjoying a few years of robust profits after oil prices surged when Russia invaded of Ukraine in early 2022, oil companies are facing a more uncertain and difficult future.
Chevron employed roughly 45,300 people at the end of 2024, around half of them in the United States. The layoffs are expected to take place over the next two years as Chevron seeks $2 billion to $3 billion in savings.
The company has been signaling for months that job cuts were on the horizon, and in the fourth quarter of 2024 it recognized $715 million in severance charges.
“Chevron is taking action to simplify our organizational structure, execute faster and more effectively and position the company for stronger long-term competitiveness,” Mark Nelson, the company’s vice chairman, said in a statement.
Last month, the British oil giant BP said it would cut more than 5 percent of its work force. And many others, including EQT, a natural gas producer based in Pittsburgh, announced plans last year to shed staff after completing acquisitions.
At more than $71 a barrel in the United States, oil prices are above the level that most companies need to make money drilling new wells domestically. But prices are a lot lower than what producers enjoyed in 2022 and 2023. Some analysts and executives are also concerned that prices could fall further if global production outpaces demand.
Chevron and other oil companies are tightening their belts even as President Trump is urging them to “drill, baby, drill” while promising to remake federal policy in their favor. Mr. Trump has said he wants more production to bring down energy prices for consumers, but presidents tend to have limited sway over corporate decision-making and prices.
The layoffs also reflect much-improved efficiency at oil and gas companies, which don’t need as many people to extract oil and gas as they once did. U.S. oil and gas production has hit record highs, but industry employment has fallen roughly 25 percent over the past decade.
Analysts expect Chevron’s oil and gas production to rise about 6 percent this year, according to FactSet, even as it sheds workers.
Chevron also said last year that it was opening a $1 billion engineering and technology office in India, where it has been hiring staff to support activities in the United States and elsewhere.
The company did not detail which jobs or departments would be most affected by the cuts. Chevron employs a wide range of workers, including highly trained geologists and petroleum engineers and about 5,000 people who work at gas stations. It also uses contractors to drill and service wells. Most Chevron gas stations are owned by independent franchisees, though the company directly owned or leased 365 stations in the United States at the end of 2023.
Stanley Reed contributed reporting.
