Chesapeake Energy Corporation (NYSE:CHK) announced that it is laying off 86 people on Tuesday, in what is expected to be the first of many more layoffs as the company restructures, reports Nicholas Sakelaris for the Dallas Business Journal.
Chesapeake Energy’s restructuring
Restructuring started last June when CEO Doug Lawler replaced Aubrey McClendon. The first people to go were four high-level executives fired last month, but some reports expect as many as 2,000 jobs out of about 12,000 will be eliminated before the process is finished. The company has announced that it will finish restructuring by November 1, so if these estimates are correct you can expect the rate of layoffs to increase dramatically in the next few weeks.
“These individuals have played an important role in the growth of our company, and we worked hard to ensure that each was treated with integrity and respect throughout this process,” Lawler wrote. He said that the layoffs would affect seven different departments (admin services, communications, HR, drilling, operations, land and the company’s treasury), but wouldn’t specify which offices specifically are affected.
Chesapeake energy’s stock price up
Lawler replaced McClendon after he was pushed out for profligate spending and mixing personal and company funds, and it’s clear that investors are happy with his changes so far—the company’s stock price is up 25 percent since Lawler became CEO. He’s also eliminated some employee perks (some of the positions that were eliminated include chaplains, garden workers, and a beekeeper), and started bringing in new executives that he is more confident in.
“Finalizing our leadership team enables us to successfully execute our renewed focus on financial discipline and profitable and efficient growth from our captured resources,” Lawler wrote. “The new organizational structure is vital to the long-term health of our company, and it will continue to leverage the many positive aspects of Chesapeake Energy Corporation (NYSE:CHK)’s culture, including our agility, speed and collaborative work environment.”
No doubt news of the layoffs has other people at Chesapeake Energy Corporation (NYSE:CHK) worried about their jobs, but by announcing a clear timetable, morale should pick up again in November, especially if employees agree with Wall Street that Lawler is leading the company to long-term profitability.