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Chesapeake Cuts Jobs By 10 Percent

By Mani
Updated on

Chesapeake Energy Corporation (NYSE:CHK) has laid off over 1,200 jobs this year, amid accelerated cost cutting exercise initiated by its new CEO.

Chesapeake Cuts Jobs By 10 Percent

Following dozens of previous layoffs during the past weeks, the country’s second-largest natural gas producer laid off 800 workers.

Chesapeake’s cost cutting drive

As reported last week, Robert Douglas Lawler, the new chief executive officer of Chesapeake Energy Corporation (NYSE:CHK) is expected to complete a comprehensive review of the company structure by November 1.

Lawler succeeded Aubrey McClendon who was forced to resign from his position in June, because of controversies surrounding the energy company.

Citing restructuring initiatives, the energy major terminated 86 employees and abolished its seven-person natural gas vehicle team last month. In August, the company ousted its four senior executives including its former chief operating officer Steve Dixon.

Earlier it was expected the energy major was preparing a mass layoffs and notices had been sent to affected employees. Besides, it was expected Chesapeake Energy Corporation (NYSE:CHK) would cut 500 jobs at its Oklahoma City Campus Facility.

Initial transformation work completed

In his letter to the remaining employees, Lawler exuded confidence when he indicated that as the company executes its strategies towards financial discipline and profitable, efficient growth from captured resources, Chesapeake Energy Corporation (NYSE:CHK) would achieve its leadership role in the E&P business.

Lawler highlighted the organizational restructuring targeted to be complete by November 1 has concluded and the initial transformation work is finished.

He also intimated approximately 800 employees in various groups including Land, Operations, IT, HR, Legal, Facilities, A &D, Finance and Accounting would be leaving the company. In his letter to employees, he disclosed the company offered eligible employees a severance package which included three months’ pay, 100 percent acceleration of equity, a lump sum COBRA payment, and outplacement services.

The layoffs impacted at least 640 people at Chesapeake Energy Corporation (NYSE:CHK)’s Oklahoma City headquarters. Christopher Helman of Forbes feels shareholders, employees and citizens of Oklahoma City should be proud of Lawler as he intends to make Chesapeake a stronger, more profitable company that can survive and grow into the future.

Last month, Chesapeake Energy Corporation (NYSE:CHK)’s board of directors approved $0.0875 per share quarterly dividend to common shareholders, which is in line with all previous distributions since July 2011. However, before 2011, the company was not so generous and the dividend was $0.075 per share.

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