HOUSTON, Texas — The continuing weakness in the oil and gas sector has caused the ax to fall on another energy giant. Chevron announced they will lay off 1,500 employees worldwide. Nearly one thousand of those oil bust job losses will come directly from Houston.
Citing cost reduction efforts, Chevron said that 950 jobs will be cut in the Houston market, according to a Click2Houston.com report. 500 more will be lost in San Ramon, California, and an additional 50 will be cut in international facilities.
In one small glimmer of light, 250 of the jobs being cut come in positions that are currently vacant that will just not be filled.
“In light of the current market environment, Chevron is taking action to reduce internal costs in multiple operating units and the corporate center,” Chevron official said in a press statement. “These initiatives, which are currently underway, are focused on increasing efficiency, reducing costs and focusing on work that directly supports business priorities.”
Earlier this week, Breitbart Texas’ Peter Maffitt reported the oil and gas drilling rig count continues to decline. Currently, more than 1,000 rigs sit idle in the U.S. This is the first time in 25 years, the number has reached this low level, Maffitt wrote.
Chevron said the job cuts are part of an effort to shed about $1 billion in costs from its books.
“This is nothing like the 1980’s,” energy industry watcher Barbara Shook, Senior Reporter-at-Large with Energy Intelligence, told KHOU-CBS11. Shook has been covering the Houston energy industry for more than 40 years. “People were a little more cautious this time, just not wholesale cuts of numbers, but just the more selective process.”
On the other end of the oil industry, there is a boom in the Houston Ship Channel and industrial plants in southeast Houston. Adam Perdue, Ph.D., University of Houston energy expert, told KHOU that he predicts $60 billion in manufacturing investment throughout the Houston metroplex over the next four years.
“Once some of the new industrial plants are built that will take the natural gas liquids and more natural gas, that will ease the situation some but it won’t fix it,” Shook said.
Oil field service companies are also cutting costs and jobs. Halliburton and Baker Hughes have combined to cut more than 27,000 jobs over the past year, according to a report on the Houston Chronicle’s FuelFix blog. Halliburton and Baker Hughes are currently in talks with federal regulators in regards to a possible $34.6 billion merger.
“With market conditions remaining challenging, we have taken decisive actions to strengthen our revenue and reduce our cost structure companywide to improve profitability and remain competitive in this environment,” Baker Hughes spokeswoman Melanie Kania told FuleFix in an written statement.
Adding in the other service industry giants, Schlumberger and Weatherford International, a total of 58,000 jobs have been cut worldwide.