Chevron said Friday that it will cut up to 7,000 jobs after low oil prices pummeled the company’s third quarter earnings.
Chairman and CEO John Watson said the company expects to reduce its headcount by 6,000 to 7,000 positions.
The company has not disclosed how the cuts will be distributed or when the layoffs are expected to occur.
Chevron has cut its capital and exploratory expenditures for 2016 down to between $25 to 28 billion, about 25 percent lower than this year’s budget,
The company also plans to reduce spending for 2017 and 2018 to between $20 to $24 billion, “depending on business conditions at the time.”
Chevron reported third quarter earnings of $2 billion, or $1.09 per diluted share, down from $5.6 billion in the same quarter last year.
Foreign currency effects boosted third quarter earnings by $394 million, compared with an increase of $366 million a year earlier.
Sales and other operating revenues in third quarter fell to $33 billion from $52 billion in the year-ago period.
The company’s upstream segment was particularly hard hit by low oil prices, posting $59 million in third quarter earnings compared to $4.64 billion during the year ago quarter.
U.S. upstream operations incurred a loss of $603 million, a significant slide from $929 million in earnings from a year earlier.
“The decrease was due to sharply lower crude oil realizations, higher depreciation expenses and the absence of gains on asset sales,” Chevron said.
Worldwide net oil-equivalent production was 2.54 million barrels per day in the third quarter, down from 2.57 million barrels per day during the same period last year.
The company’s international upstream operations earned $662 million in third quarter, down from earnings of $3.72 billion a year earlier.
Chevron’s downstream segment saw earnings climb to $2.21 billion in the third quarter from $1.38 billion in the year-ago quarter
U.S. downstream operations earned $1.2 billion in third quarter, up from $809 million a year earlier.
International downstream operations earned $962 million in the third quarter, up from $578 million a year earlier.
The company took $233 million in net charges for the third quarter, down from $443 million in the year-ago period.
Cash flow from operations in the first nine months of 2015 slid to $14.9 billion compared with $25 billion in the corresponding 2014 period.
The company added that it has generated $11 billion in proceeds from asset sales over the last two years and expects an additional $5 to $10 billion in proceeds by the end of 2017.
“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,” Watson said.