Chevron Plans $3 Billion Savings, 20% Workforce Cut in Global Overhaul

Chevron Corp. is undertaking its deepest restructuring in years, replacing a patchwork of regional units with centralized hubs in a bid to save as much as $3 billion by 2026. The overhaul will fold offshore assets in the Gulf of Mexico, Nigeria, Angola and the Eastern Mediterranean into one division, while shale operations in Texas, Colorado and Argentina will be grouped under a single umbrella. Finance, HR and IT work formerly spread across dozens of countries will move to low-cost service centers in Manila and Buenos Aires. Vice-Chair Mark Nelson said the streamlined model will cut layers of management and allow technology to be deployed faster across the portfolio. The plan includes eliminating up to 20% of the global workforce, or roughly 9,000 positions. The company is also paring back activity in its flagship U.S. shale field. Bruce Niemeyer, who heads Chevron’s shale and tight-oil business, said the producer has reduced operating rigs in the Permian Basin to nine from 13 this year and will target a stable output of about 1 million barrels a day rather than chasing volume growth. If West Texas Intermediate crude averages $60 a barrel, the Permian assets are expected to generate around $5 billion in free cash flow by 2027, Niemeyer added. Chevron’s cost discipline echoes a broader industry shift as growth in U.S. shale production slows. Goldman Sachs this week said the “very rapid” phase of American crude expansion has passed, with maturing reservoirs and mid-$60 oil prices likely to keep national output flat.