- Chevron opts for job cuts in the U.S amidst a steep decline in global energy demand.
- Coronavirus outbreak to further weigh on the global energy market this year.
- U.S oil futures lose 24% with an even greater 40% decline in natural gas futures in 2020 so far.
The lower global prices for oil and gas have recently pushed Chevron Corp into strategizing for reducing expenditures. As part of the program, the American multinational energy corporation is opting for job cuts and offered buyouts to its U.S workforce for oil exploration and its production on Monday.
Second only to Exxon Mobil in the league of U.S oil manufacturers, Chevron evaluated its options after assessing operations towards the end of 2019 when the energy prices started a downward rally. The company highlighted its plans of reducing staff in the shale gas unit only while no such comments were made regarding its other businesses.
Coronavirus Outbreak Is Likely To Weigh On The Global Energy Demand This Year
The current energy prices fuel higher production but lower demand that have recently pushed Chevron’s competitors to opt for a similar strategy of job cuts in the U.S. The Coronavirus uncertainty is further weighing on the global energy market as well.
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While some sources highlight the probability of Chevron’s workers to keep their jobs until the last quarter of 2020 after agreeing to the buyout offer, others report that the company wishes to create jobs for the shale gas unit employees in the Appalachian region of the U.S.
In its warning to Pennsylvania state, Chevron stated that as many as 320 jobs are likely to be cut in the state in the upcoming months. An accurate count of the total number of countrywide jobs that the company plans to lay off, however, was not divulged at this stage.
As part of the agreement, employees that fail to get a position in one of the other businesses of Chevron will be offered outplacement services and severance pay. According to Chevron’s spokeswoman, the restructuring will help the company direct its resources and investments into segments that are likely to enhance returns and make operations more efficient.
U.S Oil And Natural Gas Futures Declined 24% And 40% Respectively In 2020 So Far
Chevron’s total global count of workers was revealed at 48,200 in December 2019 that marked a decline of 7,000 workers as compared to the figure for 2016. 25,400 employees or a massive 53% of its workers are currently located in the U.S.
Owing to a huge impairment charge of $10.4 billion, Chevron’s recent quarter brought significant losses for the company.
With the Coronavirus outbreak weighing on the global energy demand, experts forecast the slowest growth in 2020 in the past 10 years.
U.S oil futures have so far seen a 24% decline in 2020 while an even greater 40% decline in natural gas futures has been reported.