Posted on 09/30/2015 5:27:34 AM PDT by thackney
Chesapeake Energy Corp. is shedding 740 jobs, about 15 percent of its workforce, as part of an effort to trim costs as low oil prices linger, the company said Tuesday.
It may be the Oklahoma oil producer’s first round of mass layoffs since the plunge in crude prices began last year, according to a tally of industry job cuts kept by consultancy Graves & Co. The company says it will have about 4,000 after the cuts.
“While this was extremely difficult, we are acting decisively and prudently to enhance the long-term competitiveness and strength of Chesapeake,” CEO Doug Lawler told employees in an internal memo.
“We must remain focused on building an enduring, resilient and profitable enterprise – one that can flourish in any commodity price environment,” he said.
The cuts will cost the company $55.5 million in one-time charges in the third quarter. About 562 jobs will be cut in Chesapeake’s hometown of Oklahoma City.
Energy consultant John Graves estimates oil producers have contributed about 15 percent to the oil industry’s job cuts since the slump began, but that portion is set to increase as drillers begin to plan their annual investment budgets for 2016 as the oil market shows no signs of an immediate recovery. For example, ConocoPhillips earlier this month said it plans to cut 10 percent of its global workforce, about 1,800 employees.
U.S. crude rose 80 cents on Tuesday to $45.23 a barrel on the New York Mercantile Exchange. Brent, the international standard, has risen 89 cents to $48.23 a barrel on the ICE Futures Europe.
And unemployment is still holding at 5.1 percent right? If 94M are out of work and there are 310M in the U.S. its obvious the Department of Labor is using Common Core math to arrive at its answer.
Gotta love that Obama economy.
At first glance, that number seemed too low. It is probably correct; they had earlier split the company nearly in half. From their 2014 annual report:
Chesapeake had approximately 5,500 employees as of December 31, 2014 compared to approximately 10,800 employees as of December 31, 2013. As a result of the spin-off of our oilfield services business in June 2014, we experienced a reduction of approximately 5,100 employees.
http://www.chk.com/Documents/media/publications/annual-report-2014.pdf
Page 20
That oil field services company spin off ain’t doing so great either.
I retired from oil and gas. Last 6 years were with Chesapeake. Retired before Aubrey left. Still have a lot of that stock. The slumping industry is really a hit for the Oklahoma City economy.
They only count those actively looking for work. If you are happy with the government welfare check, you are not counted in the unemployed.
The labor-force participation rate stayed the same last month at 62.6%.The participation rate—the share of the population either working or actively looking for work...
http://blogs.wsj.com/briefly/2015/09/04/august-jobs-report-the-numbers-2/
I see the frac sand draining through the hourglass. The energy and oilfield players are going to look a lot different on the other side of this slump.
I would guess it is worse, given the drop off in drilling.
And US oil companies are still importing billions of dollars of oil from the Middle East and Africa, when our domestic oil and gas industries are suffering. Worse, we have Jimmah Carter era laws forbidding the export of our own oil. It’s a wonder we have survived our rotten government this long.
First ones cut are the growth-oriented professionals like explorationists, drillers and new-acreage landmen. Keep a small core of experience and let go the new and highly-paid.
No growth for awhile, so companies hunker down on making the cashflow to pay the bills.
Gerald Ford actually. I believe Nixon administration had got the process started.
http://www.ibtimes.com/why-us-bans-crude-oil-exports-brief-history-1562689
I like what I see from Enterprise Products Partners...
So 740 full time jobs will go bye-bye, but a couple thousand part-time retail/barista/cashier/hamburg flipper jobs will be created. Net increase of a couple thousand jobs. The obam will crow and strut about this “accomplishment.”
Obama:
War on coal-progressing nicely.
War on gas-just beginning.
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