10 years ago we had nearly 65k employees. Then it dropped to a 50k range. Then we got to the 40k range and it's trending even lower. What's the end number we're looking at here? How many people do they think they can run this place with while still being relatively productive? 30k? 20k?
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According to "Price's Law," the square root of the number of people in a group typically produces around 50% of the work, meaning that a small portion of the group is responsible for a large portion of the output
“ Chevron is down to 25,000 employees with a much smaller operational footprint around the world but a 50% higher market cap at the same time.”
A 50% increase in market cap over 10 years is really anemic. Hess struck gold with Guyana which is clearly why their company was doing well. Chevron will wither over time because we are incapable of finding and developing new reserves of energy.
5000 to 7500 could be the right number as long as growth is not on the table.
Believe me 20 years ago we were slim... find someone from Texaco if there are any left,
and let them tell you how low it can go.
Chevron will continue to cut employees as they sell assets or JV developments. If you're wanting to staunch the bleed:
- Learn how to find oil (cough G&G department).
- Learn how to develop projects in a cost competitive manner (cough PRC)
- Learn how to drill wells in-line with peers vs. 30% hot (cough D&C)
- Learn how to operate assets without 3x the G&A drag of peers
It's not difficult. It just requires discipline and functional knowledge.
Their target is for the company to be lean enough to attract joint venture groups to come in and buy Chevron who will then sell off the assets in pieces. The leadership objective is always focussed on maximizing shareholder return which a sale at the right price would accomplish. Wake up everybody - there is no long term Chevron plan.
To answer your question, I would suggest looking at the Hess model and the company's history. Prior to 2012, Hess was a $20B company with over 12,000 employees worldwide with multiple international assets and a fully developed downstream business with refineries, gas stations, etc. The company had a large global footprint, but not profitable due to high operating costs -- Hess was basically just running in place for a long time. Then Elliott Management got involved, shook up the BOD and forced the sale of all the non profitable cr-p with waves of upon waves of downsizing and layoffs every other year. Fast forward to today, Hess is a $60B company with only 1,800 employees and its ROCE is light years ahead of the rest of the independents. Granted, MOST of the Hess value comes from its investments in Guyana, so you could make an argument that without Guyana, the story above would not be a successful one.
Having said that, all evidence is pointing to Chevron trying to replicate the Hess downsizing story while at the same time replicating Exxon's business practices. Don't be surprised if by 2035, Chevron is down to 25,000 employees with a much smaller operational footprint around the world but a 50% higher market cap at the same time.
Can’t answer your question but just came back to this board to say how happy I am not to be at Chevron anymore. The grass can be greener!!
LC, the CIO, stated in the IT townhalls this week, the number of US based IT workers that will be eliminated will be replaced by an equal number of IT workers hired in low cost countries. So the net IT employee count will be zero in quantity, the cost will just be lower. In addition, he acknowledged there will be a continued reduction of US workforce over the future years to continuously decrease costs. Therefore, there will not be any stability in the Chevron IT workforce going to 2026 and beyond. Chevron will not be retaining the talent they need to move into the future because the best IT workers will gain knowledge and move on when they have the experience to increase their opportunities. Anyone who works at Chevron knows the opportunity to grow has always been limited for the majority (90%) of employees. The younger staff will stay long enough to move on to their next Gig...
@a2+1jnrd6rhc more like AI agents...
You’re thinking about this wrong’s Something you need to realize is that upper management is all about the bonus modifier. Upper management bonuses is tied to several metrics and when they show we’re at bottom quartile this or bottom quartile that, what that really means is we didn’t get our bonus. Greed and power and the power of short term returns are a bad combination. These cuts will work short term and with MW nearing then end of his career he wants a huge return.
@a5+1jnrd6rhc I would wager they aren't playing by all the rules and taking a lot more risks than we are too. Not to mention, size adds complexity and bureaucracy. You don't need a lot of things we have when you play in a small sandbox...
I've seen several JV's and it would scare me to be working in their facilities every day.
Compare O&G company EOY 10K EBITA per full time employee. The numbers for some of the low cost independent E&P operators are staggering compared to here.
Just one less person…
I’m sure their target is 15k
1 - MW
The rest contractors or offshore.