Chevron to shed 2,000 jobs, sell assets
Chevron Corp. said Tuesday that it would cut 12% of its workforce and sell some overseas operations as it retrenches to stem the red ink in its struggling refining, marketing and transportation operations.
The San Ramon, Calif., company said that 2,000 employees would be eliminated out of 17,000 workers in the so-called downstream part of its business.
Executives of the second-largest U.S. oil company said they were still evaluating where the layoffs would be made. Chevron spokesman Lloyd Avram said Chevron planned to have the restructuring completed by the third quarter.
In addition, Chevron said it would sell its Pembroke refinery in southwest Wales as well as other some of its other businesses in Europe, the Caribbean and parts of Central America. Chevron is reviewing refinery operations in Hawaii and parts of Africa, Avram said.
Chevron has said it would reduce spending by $1 billion this year on its refining, marketing and transportation operations.
The refinery industry was hard hit by financial losses in 2009 as demand for gasoline plummeted during the worst global economic downturn since the Great Depression.
“Downstream conditions are likely to be difficult for the next several years,” Mike Wirth, executive vice president of Chevron’s global downstream business, said in a statement.
Argus Research analyst Phil Weiss said Chevron might have a hard time getting a good price for a refinery with the glut of supplies in the U.S. and Europe.
Chevron said severance charges were expected to range between $150 million and $200 million on an after-tax basis in the first quarter. More staff reductions are expected next year, the company said.
Chevron’s stock fell 34 cents to $74.30.
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