Chevron Corp slashing 10% of its workforce

Chevron Corp has announced that it is cutting off 10% of its workforce, which will save its budget. On Friday, Chief Executive Officer John Watson gave a downbeat view of an industry facing a lot of problems due to low oil prices.

An over 55% drop in crude oil CLc1 since past year has rippled through the global energy industry that has forced producers and their suppliers to make difficult decisions.

In the case of Chevron, that means slashing its budget by 25% in the coming year by spending less in Australia, Angola and the US Gulf of Mexico, where the Number 2 US oil company has main growth projects.

During a conference call with analysts and investors, Watson said that they need to be more efficient at what they do. When he said that prices must rise ultimately, he was ‘sober regarding the present realities of lower prices for the coming few years.

The news disclosed when Chevron also reported a sharp decline in third-quarter earnings that still beat expectation of Wall Street due to cost cuts and powerful refining margins.

The pain of the company was more severe because the larger rival Exxon Mobil Corp had not just posted stronger-than-expected results on Friday but also had not made any announcement of any huge layoffs.

Chevron is looking forward to spend $25 billion to $28 billion in the coming year and is hopeful to further cut down spending in 2017 and 2018. It is an acknowledgment that the company doesn’t expect oil prices will bounce back soon.

A California-based company, San Ramon has also said that it would lay off 6,000 to 7,000 workers.