Chevron Corp cut its 2016 capital budget by 25 percent and plans on slashing up to 7,000 jobs, or 11 percent of its workforce, as part of an effort to deal with plunging profits.
The oil giant, which currently employs 64,700 people, has been forced to make tough decisions and cut costs.
“With the lower investment, we anticipate reducing our employee workforce by 6-7,000,” Chairman and CEO John Watson said in a statement.
Watson said that operating and administrative costs were 7 percent lower than last year.
The company expects to spend between $25 billion to $28 billion in 2016 and said that there may be further cuts in spending in 2017 and 2018 as well.
“We expect further reductions in spending for 2017 and 2018,” Watson said. “We are focused on improving results by changing outcomes within our control.”
Chevron posted third-quarter earnings of $2.04 billion,or $1.09 per share, down from $5.6 billion, or $2.95 per share, in the same period last year.
The results were better than expected though. Analysts surveyed by Zacks Investment Research expected earnings of 79 cents per share.
Revenue dropped 37 percent to $34.32 billion.
Chevron’s average price for a barrel of crude oil and natural gas liquids in the quarter was $42, compared to $87 last year. The average price for natural gas was $1.96 per thousand cubic feet, down from $3.46.
The company expects oil and gas output through the end of 2017 to increase between 13 percent to 15 percent, down from its previous forecast of a 20 percent rise.
Chevron shares have plummeted 19 percent this year amid the worst oil-market slump in over three decades.