Thread regarding Chevron Corp. layoffs

25 years as an employee, 10 years upstream contract. I have been through 7 rounds of layoffs as an employee and 4 as a "silver mining" contractor. There are two things that have been devised within the company that have reeked havoc. Don Paul had his way with ETC which created a system where operating companies were forced to pay exorbitant prices for work that in many cases is sub par to worthless. Some of this involves "diversity". Before that research "COFRC" expense was allocated to the business units. This was where the high end technology was created and sometimes dispersed through the system to create efficiency and provide remedy to technical problems that service companies could not provide. During that time there were corporate "chiefs" of the critical disciplines . .. PE, Drilling, Geophysics, Stratigraphy, Development and Exploration Geology, etc. these people reported directly to the CEO and staff. This was a link to the pulse of activity in all projects. Call it a group of people with a filter from the technical issues to the pure business side at the top. The new ETC created incentive to corporate drone managers in the form of MIPS for following a corporate policy that was driven more by fear of litigation than getting business done. Common sense went down the drain. Business planning became similar to a bank with no collective understanding of the core business (speaking from upstream only). The disconnect leads to bad business decisions from people who haven't a clue as to what puts oil in the tanks. Process driven business that has lost the focus on the end result leads to self motivated strategy that bypasses reality for a corporate reward that is based upon fear of public opinion and litigation. The board of directors should now be shivering in their seats because they have lost connection with the base business due to a plethoria of concerns that are unrelated to proper management of the assets.

Anonymous124299, have you had a serious discussion with your supervisor since being notified your position is closed from participating in the ROM? Just asking. If you are not satisfied in your current job and would like an opportunity to try something new, I don't see why your supervisor won't escalate your request to be ROM'ed, even at the risk of not having a job afterwards. If you approach the matter in a professional manner with your supervisor (and maybe even with your HR Business Partner in the same meeting), I think you have a good chance to get your wish. Management would prefer to give your position to someone else who wants it over keeping a disgruntled employee on the job. If you are really wanting to do this and you have the buy-in of your spouse, then time is of the essence. Talk to your supervisor this week and don't be confrontational. Best of luck and stay positive.

Yes it closed means I will not get to participate in ROM. I want to participate in ROM because I am sick of this job. Even if it means risking not getting a replacement job. I'm close to leaving as it is

A while back I was getting off the plane at IAH. As I was gathering my luggage, a nicely dressed, distinguished looking person came up to me, hand extended for a shake and said 'John, can I give you a ride into Houston?'. I was a bit befuddled as I had not personally met this person before but I knew they had recently become the manager of a very large chunk of CVX and reported directly to Watson. I stumbled a bit as we shook hands and said ' hi mr/ms Manager, I'm John Smith and. . ' they interrupted saying yes, I know who you are. My car is here. Where can I drop you off?' I had a very pleasant and frank 1-on-1 drive into town with the big boss (much to the consternation of supervisors & division managers).

I tried to explain to non oil biz / CVXers just who I got a ride from. When I said it was not my boss, not my boss's boss, not my boss's boss's boss, not my boss's boss's boss's boss, not my. . .' A friend interrupted, 'wait, wait a second. . . Did you get a ride with President Obama?!' We all laughed at how pathetic it was, all these ridiculous 'management' levels.

If Alpha / all these reorg studies are implemented without a significant cut to the bloated 'management' staff (which long ago became a parking place for so many mediocre and even subpar sycophants) and their bloated salaries / retirement goodies, the entire reorg exercise will have been a farce and, indeed, CVX will be a very troubled company

Anonymous123676, which group you are in ETC? What do you mean your position is closed? You do not have to go through ROM? If you want to keep your job, you did it. Not sure ehy you are not happy?

Exactly right, Fed Up. I can barely take it anymore. I'll probably be leaving in the next several months. I'm in one of the closed positions in ETC and will not get to participate in ROM. They are closing my position so I cannot move from my current job. Keeping me there, pissed off. I want out of etc but I'm locked in.

You've hit the nail on the head "Thanks Texaco". It's become a cesspool of PC nonsense. There USED to be a Chevron Way, but it came from within each employee. Now, it's just slogans, idiotic meetings, nothing but bullshit, which has resulted in the unintended (?) consequence of harboring intellectually deficient employees because of their protected "class". These people are toxic to the work place. Their mere presence degrades the organization. That the company fails to deal with them, erodes confidence in management. Even if Chevron were a strong, vibrant, healthy organization it would be challenged in today's environment, but Chevron has hobbled itself with linguini-spined managers whose affinity for PC horseshit is overshadowed only by their incredible egos and lack of business sense! If, at the end of all this nonsense, there are no discernible changes in all levels of management, and assuming a low-oil-price environment continues, why should anyone expect the company to improve? Unfortunately, there is no evidence to suggest the capability to recognize and deal with such issues even exists.

It might help if every office meeting didn't start out with a 15 minute safety moment followed by an equally long diversity moment.

It's funny how none of this ever comes out in the global employee survey.

123392, we were in serious cash flow trouble BEFORE the price drop. The Saudis declining to play swing producer is a game changer. Your analysis is naive. Are you in management? I hope not.

123157 spot on analysis. The cash flow pressure on Chevron is immense. If the $40 environment continues we will not be able to continue surviving by making more significant cuts and meet our shareholder-value driven production increase commitments. There is absolutely no way we will achieve our production goals with the budgets envisioned for the 2016-2017 operating period, regardless of price fluctuation. The assumption that $100 oil would prevail will be our CEOs legacy. It may spell the ultimate demise of Chevron as we know it. Too big to fail? Maybe. New leadership at the top is needed.

After 12 years of loyalty to this company, I am simply fed up! At the last NAM Cap Commit. meeting, they were declaring $200 oil would be here by 4th Quarter 2015. Here we are mid way through Q3 and and no sign yet of the let up in over production and weak demand. Honestly I feel as if there are plenty of other cost cutting measures that can be had to keep our bottom line fiscal targets within reach. I saw one guy printing out color copies for his kid's bday party... 42 copies in all! I did a DCF analysis and determined that those print outs will have an estimated $7.43 hit to margins by 2017! Outrageous! Another coworker I know eats grits and eggs every morning! If people like these two weren't so focused on milking every perk and instead focused on continuous improvement then we would actually be weathering this downturn with some agility! Looking forward to see who gets the axe!

Right on Rough Neck!! Precisely on the money. I urge you and everyone else at Chevron to send this website to Corporate HR so they get the "pulse" from real employees. Send it to them anonymously in a dozen or two intraoffice envelopes. Caution though: Don't get your finger prints on the note and don't lick the seal on the envelope (DNA).

Well Anonymous 123392, there are opinions. I agree oil business is a commodity business but that is only part of the company's situation. The other part is endemic, CVX has the larger ratio of debt vs capex than any other major, and operates in more costly, expensive, and risky conditions. Although HB and Baker layed off people, and several others such as CP, none of them did it at +12% rate. Why? Why is CVX planning to reduce its workforce at such levels? It can't be related only to oil price, surely is something else, and that is DEBT as it has been already posed elsewhere in the board. Hiring a lot of people Just because oil price is high is not responsible management, nor it is to fire people who support families, children, and ill and elder relatives when the price is down. And we knew price will come down, oh yes! Unless somebody with power forgot to pay attention to the learnings from the oil industry in the 80s and 90s, or even 2008-09, or simply chose to ignore them

Chevron is not failing and I'm tired of seeing people say that. We are in a commodities-based business. When oil prices are high we are making high profits and able to pursue large long-term projects. With that comes an increase in hiring.

Now oil prices are low in a way that no one could have or did predict. Thus money is not coming in hand over fist. We don't know if this is a short term blip like 2008-9 or if it's a long term decline in prices like 1985-03. As a result we have to look at the number of employees we have and trim. ALL energy sector companies have to do this.

The difference with Chevron is that we are doing in a careful, methodical way because we can afford to and that is our culture. We didn't just go in and slash 10,000 jobs right off the bat like Halliburton and Baker Hughes did.

We aren't a poorly run company nor or we in trouble. We are responding in a responsible way to a steep decline in oil prices from a high of $100 to now $48-52.

If you are going to work in this business you will be paid well. The SMART thing to do is save your money (at least 6-8 mos emergency) fund and prepare for times like these.

Chevron will be the fodder of business articles for years to come. It is a bloated company full of politically correct, trite, meaningless PGPA sayings such as "The Chevron Way." It is more like "The Chicago Way," with arrogant bosses giving themselves raises and high praise. Every two or three years, they come up with a new ROM to get rid of the competition. Very few have studied business, management, operations or finance.

Chevron has become so top heavy, that they rely on service companies like Halliburton and Schlumberger to do the real D&C work at very high prices. They use BCG to do the real management.

Thank you for your insightful analysis Anonymous123157

We'll said, Anonymous 123157. Explained concisely and truthfully.

"Use to do so well."

1. The obvious decrease in price per barrel.

But even then, Chevron is still very wealthy. Which brings me to reason #2...

1. Corporate greed and the need to impress the shareholders.

Perspective from a 32+ yr, retired Upstream old guy: What happened? It wasn't one thing. It was many.

It was a company that got too big, too fast. It was a company that went through two, very large M&A's in a short, 6-yr period. A Texaco merger that was managed well, a Unocal merger that was not. Texaco was a merger of equals with similar view towards many aspects of the business. Cultures were not identical, but close enough that blending people and processes worked well enough. Unocal brought with it a very different group. Resentful, arrogant, and aggressive. Shooting from the hip, these were not ones to force into a company focused on deliberative process. Unocal folks were paid better, in some cases significantly better than their peers at CVX. This is key. Because CVX placed them in the new organization based on pay, rather than position, many of these folks were placed into higher positions in CVX than they had occupied at Unocal. So now there were folks, often in-over-their-head, in management positions, cynical of CVX processes and procedures, making rash decisions on critical issues. Recent CVX technical and execution issues right around the world can be traced back to this event.

Timing, they say, is everything, and in CVX's case, it could not have been worse. Decisions to go forward with Australia projects may have been good, but timing was horrible. Pricing of everything from labor to materials went sky-high, so that cost-over runs became the norm. This should have been anticipated. Funds that could have been used to support other, less capital-intense projects was diverted to keep Aus-LNG projects afloat. Accomodative budgets blew up to levels supported only by overly-optimistic commodity prices, and as these projects dragged on, CVX was forced to take on greater, and greater levels of debt.

As long as prices remained relatively high, all was good. But of course, they didn't. What CVX did not see was rapid, large growth in supply, faltering global demand growth, and refusal of Saudi to play its historic role of swing producer. These factors could have been anticipated. Or at the very least, supply growth should have been anticipated as it was happening predominantly in CVX's own backyard- right here in the States. So now prices have fallen to levels not seen since mid-2005. And they may fall further. $40/bbl is not unrealistic.

So now CVX has very high debt levels, with a dwindling income profile barely able to fund current dividend obligations, let alone reduce debt levels. The company is faced with the unenviable task of cutting costs in order to execute one of its primary (and legal) responsibilities - to protect shareholder value. And of course reducing head count is at once one of the most brainless, yet effective ways to reduce costs. The fact that management felt compelled to farm-out this responsibility to the Boston group speaks volumes about its own competence, and its compassion toward its employees.

I retired. The ol' Duder jus' up an' walked away. Then,... well, you know the rest.

If you use stock price as a measure, Chevron is failing due to their business model which is predicated on $80+ oil. Chevron has an attraction for the most complex projects globally that are very difficult to execute. Now that oil price is down and will be down for extended period of time, Chevron is losing money needing to finish difficult MCPs in the face of declining global production until these projects come online. That's a strategic level decision so fault for that lies in the executive offices. Contributing factors to failure are highly redundant processes that frequently are the "tail wagging the dog" insofar as the processes unfold to validate decisions already taken. Decision making is concentrated at the highest level with often poor quality work the basis for information delivered through cumbersome processes to management that in turn make poor decisions at the tactical and strategic level. In many of the BUs and Corporate alike, more than a few employees don't understand what to do or don't cooperate if they aren't in full alignment which is why execution is so poor. Poor execution for a myriad of reasons is the primary tactical reason CVX isn't delivering production on time and now projects years behind schedule will have first production in a low price environment with project costs >90. Lastly, Chevron has a great number of average to below average employees exacerbating execution. Cuts that are made will likely be so subjective that little positive comes out of the restructuring of the company.

123050 is right on!!

I do not think we are failing, we are just affected by the overall downturn, I think our peers are doing as bad as we are and Chevron will bounce back as soon as price of oil recovers

If Chevron doesn't get rid of all the inept managers and supervisors that exist throughout the enterprise and don't use this opportunity to jettison the non productive workers that are everywhere, you will see CVX continue to tumble down to new lows. Cutting $1 billion through Project Alpha is necessary, but the proper cuts are needed to ensure this scenario is not repeated for a very long time. Unfortunately, it's the inept managers and supervisors that are deciding who goes and who stays. Pure nepotism and chaos.