Chevron USA Inc. announced Wednesday that adverse market conditions have prompted it to lay off 56 workers in the San Joaquin Valley, or 3 percent of its Bakersfield-based business unit.
The move adds to the 1,200 or more oil-related jobs lost in Kern County since late last year as oil prices have fallen to below $45 per barrel from more than $100 in June 2014. The decline is widely attributed to strong domestic production amid declining international demand.
Layoffs at Chevron — which the company said have not been necessary for “many years” — are especially significant because most local industry layoffs since December have occurred at oil field service companies hired by petroleum producers to perform well drilling and other activities.
Layoffs within the company suggest outside cutbacks have been insufficient to keep costs in line with revenues, and that Chevron is not hopeful for a near-term recovery in the price of oil.
The company declined to say what kind of positions were cut, such as whether they were professional engineer and geologist positions, or jobs that pay less because they require less training.
In December, the company issued a statement locally saying Chevron was taking a long-term view of oil prices “because our investments last for decades.” It took an optimistic tone at the time, saying the company “continues to believe global demand for oil and natural gas will grow, while existing sources of supply will inevitably decline.”
On Wednesday, Chevron couched its layoffs announcement with an affirmation that it continues to look for ways to save money.
“In light of the current market environment, Chevron is taking action to reduce internal costs in multiple operating units and the corporate center,” it said by email. “These initiatives, which are currently underway, are focused on increasing efficiency, reducing costs and focusing on work that directly supports business priorities.”
This article was written by John Cox from The Bakersfield Californian and was legally licensed through the NewsCred publisher network.