Chevron, the second-largest oil and gas company in the United States, announced on Wednesday that it plans to lay off up to 20 percent of its workforce—approximately 9,000 employees—as part of a global cost-cutting initiative.
While Chevron’s cuts are deeper than those at some competitors, they reflect a broader trend of job reductions across the oil and gas industry as companies adjust to lower oil prices. After experiencing several years of high profits following the surge in oil prices triggered by Russia’s invasion of Ukraine in early 2022, the sector now faces a more uncertain and challenging environment.
Chevron employed around 45,300 people at the end of 2024, with about half of them based in the United States. The layoffs, which will be implemented over the next two years, are aimed at achieving $2 billion to $3 billion in cost savings.
The company had been signaling impending job cuts for months and recorded $715 million in severance-related charges in the fourth quarter of 2024.
“Chevron is taking action to simplify our organizational structure, execute faster and more effectively, and position the company for stronger long-term competitiveness,” said Mark Nelson, the company’s vice chairman, in a statement.
Globally, the industry is seeing similar trends. British oil giant BP announced last month that it would lay off over 5 percent of its workforce. Other firms, including EQT, a major U.S. natural gas producer, also revealed downsizing plans after completing acquisitions.
Despite oil prices hovering above $71 per barrel in the United States—above the breakeven point for many domestic producers—prices remain well below the highs of 2022 and 2023. Some analysts and industry executives worry that global production could exceed demand, further pressuring prices.
The restructuring also reflects growing efficiency in oil and gas operations, which require fewer employees due to technological advancements. Despite a 25 percent decline in industry employment over the past decade, U.S. oil and gas production continues to reach record levels.
The global energy market remains in flux as geopolitical shifts and policy changes influence corporate strategies. While former U.S. President Donald Trump has urged domestic producers to increase output with promises of policy support, government influence over corporate decision-making and market-driven prices remains limited. Meanwhile, Europe is pressing ahead with its energy transition policies, potentially impacting long-term demand for fossil fuels.
Chevron’s downsizing comes as the company continues expanding internationally. Last year, it announced the opening of a $1 billion engineering and technology center in India, where it has been increasing hiring to support operations in the United States and other regions.
The company has not specified which departments or job functions will see the most cuts. Chevron’s workforce spans highly skilled geologists and petroleum engineers, as well as approximately 5,000 employees working at gas stations. The company also relies on contractors for drilling and well-servicing activities. While most Chevron-branded gas stations operate under independent ownership, the company directly owned or leased 365 stations in the U.S. as of the end of 2023.
As Chevron and its global counterparts adjust to an evolving energy landscape, the company’s restructuring signals broader shifts in the industry, with efficiency gains and strategic realignments shaping its future trajectory.