I was in a meeting last week that suggested there would be steeper rig count cuts in sustained $40s/barrel prices. What happens at Chevron if that plays out? Do we go through another round of layoffs in 2026? Other large companies are already geared up to start layoffs in preparation for $40/barrel oil. Are cuts this year going to be steeper to account for that possible future? Or do we just do this sh-t all over again next year.
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If you survive, you start getting ready for the next one in a year or two.
@12g no sh-t. I think OP got that from the meeting they were in.
Oil prices are generally expected to go down in the near future, specifically for 2025 and 2026. This is due to increasing global oil production outpacing demand growth, leading to a build-up of inventories.
pray for the worst
hope for the best
CVX is in a commodity business. We operate assets over multiple decades. Profitability tracks oil price and is completely out of management’s control. Their only levers are opex and share buybacks. CVX’s last in class management of capital projects means controlling opex is their sole focus so they are cutting staff. As that, and share buybacks is the only thing management does, expect more of the same in the future.
There is a too much discrepancy/ gap between salaries. If those wirh huge salaries will have a cut, then there will be less layoffs. Maybe a new policy should implemented like: "when the oil price is at certain low threshold, higher salaries will be automatically reduced untill oil price goes back up". This way there will not be a need to layoff then hire again and so on.
@aw, whilst oil and gas has always been a bo-m/bust industry, here’s why this time is different.
This time, the jobs aren’t coming back. They’re being offshored. In the next bo-m, hiring to meet demand won’t be in the US: it will be in India.
Couple that with the fact that significant discoveries are becoming less frequent, and those discoveries that are significant require huge capital investments, or large amounts of risk, that the company has seemingly little appetite for — yeah, this time is different.
I have even wondered if the move to India is partly because the company knows they’re not going to be able to secure future talent in the US because it’s no longer going to be a desirable industry to be in.
If you want to stay in the O&G industry, find a small company to work for. You'll gain more experience and the work pace will be quicker. These companies can't afford to have slackers hanging on in the background.
Nope, "the foundation for perpetual layoffs" was laid long before you came along, junior. You're NOT SPECIAL!!!!!!! Get it through your thick-a.ss skulls.
It appears that this round is laying the foundation for perpetual layoffs. Engine will keep ramping up, GBS (formally FSS) will keep ramping up as well.
Look up Corporate Terminal Transformation in ChatGPT and you will see what MW is doing and why, and what the future will bring. Not good.
The layoff is slated to continue at least into H2 2026, the current layoff cycle does not account adjustments for ENGINE nor the potential HESS integration, depending on how ENGINE progresses, more is on the horizon beyond 2026 to have additional cost savings and it could be equal to 25% or 35% of current layoffs [i.e. additional 2000 to 2800 people beyond 2026]. We are not longer in growth mode, unless oil price tops $100 for sustained period of time, expect more cost cutting measures and workforce shrinkage.
MW wants his 200% bonus payout, once he gets it, he’s out. All this is purely about getting a great bonus and better shareholder return. Employees don’t matter. We need another Watson to go back to the old days.
The reality is that as long as MW and MN are on the ‘throne’, layoffs will happen in quicker succession than what would be deemed normal. Each leader has a ‘playbook’ that they use over and over again. MW took over downstream and Accelerate Downstream and the sale of many refineries (a lot of which were profitable) followed. MN took over IP and sold off a lot of the businesses (a lot of which were profitable). MN took over Downstream and Renewal followed. MN + MW = sell and reorg. O’Reilly = massive projects. Watson = Drill Drill Drill and Go Big or Go Home. Everyone of them have a playbook!
Don’t get me wrong, Chevron needed to shed some fat, but it’s not coming from a strategic decision; It’s just the only dice these set of leaders know to roll.
To answer your question about what next, we’ll sell our profitable assets and reorg shortly.
Your post is nonsense. You’re crazy if you think our ELT believes “oil is done”. No one is forcing us to be renewables heavy, in fact we’re in the middle of acquiring Hess that will add another half million boed. We’re an oil and gas company first and the entire ELT (including JG) know it.
Oil cannot die until nuclear power is embraced and built and that’s a couple decades off at least. Maybe they’re willing to just give it up to OPEC in the meantime
I agree with a good percentage of what you stated, but there are significant differences in this specific event. I’ve been at Chevron nearing 20 years so this is not the opinion of someone who has gone through this for the first time.
We’ve seen technology evolve to a point where anyone, anywhere, can perform managerial, IT, engineering, finance, geoscience, paralegal, and other white collar work. That’s one of the reasons this reorg is different.
The other is that leadership believes that OC is overrated and there are no level of skill that cannot be equally performed by a person in Bangalore or an AI in Azure. The Pollyanna belief in both of these is driving the deep and far-reaching cuts in the reorg.
Finally there is a shared belief by MW, the board, and a good majority of Oil & Gas executives participating in Davos type conferences that Oil is done. This is not something reached based on peak oil theory or shadowy conspiracies, just a conclusion based on consensus that it’s Oil’s time to die. MW and others despite what they say, secretly believe this. I know this directly from someone who spent time in MW’s circle, who told me that he now agrees with MW that universal basic income and other WEF platform issues needs to happen.
MW claims many things for this reorg, but the real reason is to force Chevron into being a completely renewable energy company through catastrophic downsizing masked as cost-savings. Look at what is happening and connect the dots. Look at our asset sales, move of pipeline control of west coast pipelines to SIV, starvation of exploration SMEs, and a myriad of other situations that you in your circle maybe privy to and try not to see where MW is accelerating us to.
Winning in any environment
Sniveling Peon’s, how marvelously entertaining…l
The older CVX employees and those who retired over the years and took packages all had routine layoffs, re-orgs, mergers and related layoffs throughout their careers. Same as most majors. What's so special about the more recent workforce that they think they are immune from the same environment and conditions? Many folks leave O&G because of the frequency of layoffs. So now is the latest thing to snivel and whine online all day about it? Many of these posts sound pathetic. Get another job in another industry or elsewhere. Many people do it. Doesn't pay as much? Can't have your cake and eat it too.
MW will start planning the next one. It’s what he does.