Chevron Packed With Projects, But Cutting Staff to Save Costs

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--While data show an estimated $1.3 billion in projects just in the United States, U.S. supermajor Chevron Corporation (NYSE:CVX) (Houston, Texas) said it was slashing its payrolls worldwide in a cost-saving effort.

Chevron, which is relocating from California to Texas, said Wednesday it would cut its workforce by as much as 20%, or around 9,000, adding the move was necessary to stay competitive in the global market.

"We do not take these actions lightly and will support our employees through the transition," Chevron Vice Chairman Mark Nelson told The Washington Post though email. "But responsible leadership requires taking these steps to improve the long-term competitiveness of our company."

As of year-end 2023, the company had 46,000 people on its payroll, compared with 65,000 a decade earlier, the Post reported, citing data from the U.S. Securities and Exchange Commission. The report added that the company may instead leverage robotics and artificial intelligence.

The company last year was one of the first to deploy the artificial intelligence (AI) platform Copilot in Microsoft Dynamics 365 Guides, which uses AI in coordination with mixed reality to help workers improve efficiencies.

The company bucked industry trends during the fourth quarter, meanwhile, by posting total earnings of $3.3 billion, a 43% improvement over the same period in 2023. But full-year earnings declined 17%, or around $3.7 billion, to $17.7 billion.

For just downstream, it took a $248 million loss during the period, compared with $1.1 billion during the fourth quarter of 2023.

Working to cut costs by as much as $3 billion by the end of 2026, the company added that it recently sold off some of its assets in Alaska, Canada and the Republic of Congo. It's still moving ahead, however, with its merger with Hess Corporation (NYSE:HES) (New York, New York).

Exxon Mobil Corporation (NYSE:XOM) (Spring, Texas) is challenging the merger. A three-judge panel will consider the case in May.

Chevron, meanwhile, saw capital expenditures increase year-on-year by nearly 4%, to $16.4 billion in 2024. IIR Energy sees perhaps a dozen projects in the United States with a high-probability from Chevron, for a total investment value of nearly $1.3 billion. The bulk of that is targeting its Blind Faith and Ballymore platforms in the Gulf of Mexico (now designated in the U.S. as the Gulf of America).

The company, meanwhile, returned $27 billion in cash to its shareholders last year, which it said was a record.

Companies in general were burdened last year by a low-price climate for commodities.

Crude oil prices varied by around $24 per barrel last year, the narrowest range since 2019. When adjusted for inflation, however, it was the narrowest since 2003. That, in turn, spilled over to refiners as refining margins hovered below the five-year range for much of last year.

Margins in October were the lowest in a quarter century.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).