Feb. 13—Chevron has announced plans to eliminate 15% to 20% of its global workforce by the end of 2026 as it seeks to cut costs and simplify operations. That translates to between 6,000 and 8,000 of its more than 40,000-member workforce. It's too early in the process to know how that will impact Chevron's Permian Basin operations.
"These reductions are in line with our previous announcement of $2 billion to $3 billion in targeted structural cost reductions by the end of 2026, with some residual impact in 2027 and beyond. We do not take these actions lightly and will support our employees through the transition. But responsible leadership requires taking these steps to improve the long-term competitiveness of our company for our people, our shareholders and our communities," Chevron officials said in a statement to the Reporter-Telegram.
As Chevron begins a year of celebrating its 100th year of Permian production, the company has seen record production not only from the U.S. as a whole, but particularly the Permian, where output grew 18% in 2024.
Chevron CEO Mike Wirth told investors on the company's fourth-quarter earnings call that its Permian production averaged 992,000 barrels of oil equivalent a day in the fourth quarter and surpassed 1 million barrels per day in December. The company has begun the process of shaping its Permian Basin profile toward a plateau, lowering capital investment while continuing to grow production.
"We still expect to see 9% or 10% production growth in 2025 and something a little bit less than that in 2026. We're headed towards a lower rate of growth," Wirth told investors. "At some point you can't grow a position like this infinitely. We'll have an asset that will produce something over a million barrels per day for many years into the future. As we can maintain that with a lower rate of capital investment than we've required to get to where we are, that really opens up the free cash flow off of that asset."
Organic capital expenditures are expected to remain within Chevron's $14 billion to $16 billion guidance range. The $2 billion to $3 billion in structural cost reductions by the end of 2026 is expected to be accomplished through asset sales, scaling technology solutions and changing work habits to improve efficiencies.
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