Oil giant Chevron to cut around 10 per cent of its workforce

 
Jessica Morris
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The company has been hit particularly hard by low oil prices (Source: Getty)

The figures

Oil giant Chevron said announced it could cut between 6,000 and 7,000 jobs and slash its capital budget by 25 per cent as low oil prices continued their rampage across the sector.

Chevron now plans to spend between $25bn (£16.2bn) to $28bn next year, and expects to further slash spending in 2017 and 2018.

It reported net income of $2.04bn, compared with $5.59bn in the year-ago period.

Production fell one per cent to 2.5m barrels of oil equivalent per day.

Profits at its upstream division, which is responsible for exploration and production, crashed 99 per cent.

This was cushioned slightly as profits at its downstream division, which makes gasoline, lubricant and other refined products, jumped 49 percent.

Why it's interesting:

Crude prices, the global benchmark, have fallen more than 50 per cent from last year's high over $100 a barrel.

It's punished oil companies which are largely reliant on exploration and production to find new energy sources.

Today's results show Chevron has been particularly hard hit, with profit from its exploration and production division crashing a whopping 99 per cent.

Read more: Shell to axe 6,500 jobs as black gold price set to stay low

But it's fighting the crunch with cost cuts. That's why it has announced 6,000 to 7,000 job cuts, and plans to squeeze spending by 25 per cent.

This comes after it was forced to shelve plans for a share buyback at the start of this year - due to the cash squeeze.

What Chevron said

This statement from Chevron's chief executive, John Watson, sums it up nicely.

Third quarter earnings were down substantially from a year ago.

While downstream earnings remained strong, lower overall earnings reflected weaker market prices for both crude oil and natural gas, which depressed upstream profitability.

We are focused on improving results by changing outcomes within our control. Operating and administrative expenses are seven per cent lower than last year, and we expect further reductions in the quarters ahead.

In short

Most oil companies have had a torrid time amid low oil prices, but Chevron has been particularly hard hit. However, it's riding out the rout with job cuts and further spending cuts.

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