Chevron, the second-largest oil producer in the United States, has announced that it will incur charges of up to $1.5 billion in the fourth quarter. These charges are primarily due to restructuring, asset impairments, and costs associated with property sales.
The company is facing a decline in profits and has had to borrow money to maintain shareholder payouts. The charges are expected to result in job cuts and relocations over the next two years, although the exact number of positions affected has not been specified. Chevron's overall strategy includes cost-cutting measures and asset sales to address its financial challenges.
The company plans to reduce costs by up to $3 billion through 2026 and decrease project spending for 2025 by $2 billion. Chevron's CEO, Michael Wirth, has emphasized the importance of cost and capital discipline. The company is scaling back its expenditures on U.S. shale operations and reducing investments in new oil and gas output and refining.
The charges for the fourth quarter include severance pay, relocations, asset impairments, and property sales. However, Chevron has stated that these impairments will not impact its adjusted earnings. This is not the first time Chevron has faced impairment charges, as it has recorded significant charges in previous years. Financial analysts project a decline in Chevron's fourth-quarter profit compared to the previous year.
As Chevron undergoes restructuring, its workforce and operational strategy will be closely monitored by investors and industry analysts. The company's ability to implement effective cost-saving measures will be crucial for its future performance in a competitive market.