US oil giant Chevron is set to cut up to 7,000 jobs as it seeks to restructure after the coronavirus pandemic hammered global oil prices and squeezed demand around the world.
The firm, which is the US’ second largest producer of oil, had already said that it would reduce its budget for the year by 30 per cent and make voluntary redundancies.
However, Reuters reported today that the firm would now cut 10 to 15 per cent of its 48,000 employees around the world “to match projected activity levels”.
US crude prices have nearly halved this year due to the pandemic, as producers have been forced to shut in oil due to a complete lack of demand.
At one point, prices even turned negative as traders desperately sought to get rid of paper contracts to take physical delivery of the commodity amid fears over a lack of storage capacity.
Although prices have recovered from that point as global economies have tentatively begun to reopen, demand is likely to remain depressed for much of the year.
A spokesperson for Chevron said that cuts were being taken “to address current market conditions” and would vary depending on region and business unit.
The US domestic oil market, which is made up of about 8,000 producers, has been one of the sectors worst hit by the pandemic.
The Baker Hughes count of oil rigs last week recorded that there were only 215, down nearly two-thirds from the high water mark of 624 recorded in March this year.
According to data from IHS Markit, US producers will be shutting in 1.8m barrels of oil per day by early June in order to limit oversupply and prop up prices.
The shut-ins have led to fears that hundreds of smaller producers could go bust if prices did not rise fast.