Chevron on Thursday began implementing its previously announced work force cutback of 15%, or 9,000 jobs, and its chairman said the steps being taken "simply must be made if we're to remain a viable enterprise."
Chevron Chairman George Keller said the company is responding to "the most traumatic economic changes in our industry in a generation."
The San Francisco-based petroleum giant, heavily in debt as a result of its 1984 takeover of Gulf Oil, joined other big oil companies in retrenching to bring costs into line with today's sharply lower oil prices. Crude oil has fallen from $31 a barrel in late November to about $14 now.
Chevron announced in March that it planned to eliminate up to 9,100 jobs but did not say how the cuts would be accomplished. On Thursday, it defined its goal as reducing the company's worldwide payroll to 52,000 from 61,000 by year-end. Employees involved will receive letters next week detailing their options.
The cuts will involve 4,500 Chevron employees, one-third of them in California, who will either accept special separation deals or be laid off; about 3,000 who work for subsidiaries that are being sold to other firms, and 1,500 who in recent months refused job transfers during the restructuring that followed the Gulf merger and who subsequently resigned to take other jobs or have been laid off. Chevron estimated that another 3,000 employed by firms doing contract work for the oil company will also lose their jobs.
The layoffs and "voluntary" resignations of Chevron employees will take place in all divisions and will include about 1,200 of the company's 15,000 employees in the San Francisco Bay Area, a company spokesman said.
In Southern California, Chevron identified these layoffs:
- About 116 of its 1,400 full-time workers at the El Segundo refinery, along with an undetermined number of the "several hundred" contract workers at the refinery.
About 95 of the 723 employees at Chevron Oil Field Research in La Habra, one of Chevron's two major research laboratories that explore new technologies for finding and recovering oil. About six contract employees will also go.
"Less than 10%" of the work force of 950 in Kern County, where Chevron had already shut down about 315 of its 6,500 oil wells and idled nearly 300 contract workers.
Keller said he expects that most of the 4,500 Chevron employees whose jobs are being eliminated will leave voluntarily as a result of an "enhanced benefits" offer to those with 10 years' seniority or more.
Many of the job reductions are a result of previously announced cutbacks in Chevron's capital spending. The company has offered few details on how specific projects will be affected but said Thursday that a major 15-year, $2.4-billion Kern County expansion is being trimmed.
Claude Fiddler, manager of Chevron U.S.A.'s Northern California division, said this year's spending on steam flooding in the Bakersfield area--a promising technique for bringing heavy oil to the surface--has been slashed by nearly half to $75 million. Next year's spending will probably be about the same.
Chevron has never confirmed its previously reported plans to sell GA Technologies in San Diego, but it virtually did so Thursday by explaining that the removal of GA Technologies' 1,500 employees from the company's payroll will account for part of its 9,000-job cutback. Another 1,500 jobs are involved in the sale of refinery and marketing operations in Italy, Puerto Rico and the Northeastern United States.