I'm so sick and tired of these corporate robot talking points that are being echoed from the top down about how chevron is being outcompeted. The company is announcing 2 to 3 billion in cost cutting (mostly jobs) over the next 2 years when just over 2 years ago the company spent 75 BILLION DOLLARS on stock buy backs, the most Ive ever heard of and the most certainly in recent history. Rather than retain a small fraction of that money to maintain the jobs of the people who's labor supported this purchase, the company now wants to be frugal and send jobs oversee. It should also come at no suprise that executive compensation is tied to stock options - of course there is going to a hyper focus at the top on stock prices. Zero accountability for management/executives and the McKinsey folks continue to tell them exactly what they want to hear which is to cut technical/operations/maintenence folks - the bloodline of this industry and actually from the communities that Chevron profits in.
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"A company that chooses not to invest in people, or developing assets, or developing products, is what exactly?"
That's the weird thing. They don't want to be an oil company anymore. That would involve exploration, taking risks, and capital investment. Instead they just want to ride the decline and cut staff as they go. To what end?
Mike Wirth should be studying Boeing. Their disasters stem from changing the company culture to one that is focused on Returns rather than safety and quality. Boeing, according to investers, outsourced "too much" engineering and saw quality decline. Hmmmm....
And the new acqusition that cost how much? Some other $Bn
@bx, whilst there is indeed a difference between balance sheet optimisation and cost optimisation, it is a choice not to invest in your people.
A company that chooses not to invest in people, or developing assets, or developing products, is what exactly?
Our ELT are greedy people that are way out of touch. Too much of a "let them eat cake" attitude. The first layoffs should be with MW and MN.
You're equating operating model to balance sheet.
Chevron is trimming their cost structure because it is (substantially) worse than peers. This is an activity that they should do with $100B in the bank, just as they should with $0 in the bank.
They elected to return capital to shareholders because they didn't have a use for it. This is in part driven by the fact that Chevron can't find new fields (i.e., weak project queue) as well as Chevron's inability to manage costs (makes projects sub-commercial, prevents bolt on acquisitions, etc.).
As an aside, the lack of commercial fluency demonstrated by some on this board is shocking. I can understand why Chevron wants to replace some of their "talent."
If they haven't spent the 75 billion dollars yet that might be even more demoralizing. "Hey guys, I know we said we needed to cut 2 billion in costs and unfortunately that means jobs will be impacted but we are also going to move forward with spending 75 billion dollars to make our largest investors even richer."
They haven't spent the $75 billion yet on buybacks, but your point is still very valid. Our recent ELTs have been focused almost solely on stock price and short term ways to boost it up, knowing that after they retire or get their golden parachutes it doesn't matter to them anymore.