Chevron to cut 600 jobs across operations

CHEVRON Corporation will shed hundreds of jobs across its largely Western Australian-based operations, according to an internal memo that circulated the company yesterday as the economic downturn caused by the oil price crash continues to bite.
Chevron to cut 600 jobs across operations Chevron to cut 600 jobs across operations Chevron to cut 600 jobs across operations Chevron to cut 600 jobs across operations Chevron to cut 600 jobs across operations

Mark Tilly


Mark Tilly

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The major flagged the potential for job cuts in WA in March, saying it was dealing with "extraordinary challenging circumstances" and would demobilise non-essential personnel at its Gorgon and Wheatstone LNG plants. 

Late yesterday a memo sent internally to Chevron staff from its Australia managing director Al Williams said the company will be "adjusting its business in response to the immediate impact of COVID-19 and a deteriorating business outlook".

"With crude prices near 20-year lows and global annual energy demand forecasted to drop by 6%, the largest in 70 years, we have a challenging road ahead to preserve cash in the short-term while protecting value for the long-term," he said. 

The memo suggested the cuts would be in the order of 20-30% of its 2000 strong workforce, however in a statement to Energy News, a Chevron spokesperson said it was too soon to determine how many personnel would be affected. 

"We understand the impact workforce reductions will have on our employees, and we are committed to providing appropriate support through this difficult period," she said.

She could not confirm if employers were being stood down or laid off outright, or if workers would be eligible for the government's JobKeeper program.

"We are unable to discuss internal HR processes," she said.  

A source familiar with the matter told Energy News the cutbacks would be based on redundancies, may also include salary cut backs and employees will not know if they will be affected until the end of the third quarter. 

"Which is a long bloody period of uncertainty," the source said. 

In late March, the company told shareholders it would reduce its 2020 capital spending by US$4 billion, or 20%, and suspended its $5 billion annual share repurchase program. 

The biggest cut in capital and exploratory spending will target upstream unconventionals, primarily in the major US Permian Basin, where the company will slash more than $2 billion in spending. 

A further $1.2 billion will be hacked from upstream projects and exploration both across its US assets and internationally. 

Around $800 million will be shaved from its downstream and chemicals business. 

In a post on Facebook, industry union group The Offshore Alliance said the job cuts will leave remaining workers vulnerable to exploitation. 

"The short-sighted greed and stupidity of bean-counters to reduce the operating costs of their oil and gas assets will inevitably mean the shredding of maintenance programmes and a further deterioration of employment standards for any worker who isn't protected by a union negotiated EBA," it said. 

Chevron now joins the likes of Woodside Petroleum which has stood down some 800 workers across its operations, however unions have claimed the total figure is around 1100, after 300 additional workers were stood down at the company's Karratha Gas Plant.

Woodside however has denied this, saying the Karratha stand downs were part of the initial 800 figure.