Chevron to lay off 7,000 workers over next 3 years

Chevron announced Friday that it will lay off up to 7,000 employees – roughly 10 percent of its workforce worldwide – over the next three years.

According to an email from Chris Merrifield, spokesman for Chevron, it is too early “to speculate on which specific facilities may be affected,” but that the cuts will be made to “our upstream, gas and midstream and the corporate and service company groups.”

Chevron employs approximately 64,700 people worldwide.

Upstream refers to the exploration and production aspect of an energy company. Gas and midstream include processing, storage and transportation of crude oil and natural gas.

Chevron maintains a number of operations in Louisiana, but in Lafourche Parish they operate the Fourchon crude terminal, Leeville Shorebase marine and aviation operations, and a pipeline facility in Paradis, according to Chevron’s website.

Lysle Brinker, director of equity research at IHS Energy, an energy analyst firm, said Chevron is suffering from a cash-flow crunch because of lowered oil prices coupled with huge investments the company has undertaken.

According to Chevron’s third quarterly earning’s report released Friday, the energy giant only netted $14.9 million in profit from operations, down more than 40 percent from $25 million by the third quarter last year.

Brinker said Chevron has billions of dollars invested in projects all over the world and has suffered major setbacks in those endeavors. Chevron’s failure to tether its Big Foot tension-leg platform 225

miles south of New Orleans and setbacks in getting necessary permits in their Wafra oilfield between Saudi Arabia and Kuwait are only two examples of obstacles the oil giant faced this year in getting back to black.

“So, they’ve got to get these projects on stream as soon as possible so they can start churning out some cash flow because one of their big problems is that they have to spend billions of dollars to get these things on,” Brinker said. “They’re not generating a single penny of cash flow, which is what they desperately need in order to fund their capital program and to fund dividends for shareholders.”

Chevron has already been downsizing their workforce for the last year. First they moved their business offices from Lafayette to Covington, then slashed the office’s employee roll during lay-offs soon after.

Brinker said he expects the reduction in workforce to occur company-wide. He said he thinks Chevron’s Gulf Coast operations won’t feel the brunt of the lay-offs as sharply as Asia, for example, because of the immense investment Chevron has made in the Gulf.

Chett Chaisson, director of Port Fourchon, said he’s witnessed no slowdown in Chevron’s activity out of the port. He also said that their expansion of helicopter services at the South Lafourche Leonard Miller Jr. Airport in Galliano is still in high gear.

Chevron has been operating in the Gulf of Mexico for more than 75 years “and remains committed to Lafourche and Terrebonne parishes”, Chevron spokesman Merrifield wrote in an email. “We will continue to invest resources and work with our partners to improve the social, environmental and economic vitality of the communities in which we live and work.”

Chevron intends to lay off 7,000 employees – 10 percent of its workforce worldwide – over the next three years.

COURTESY