Chevron is undergoing a major reorganization aimed at simplifying its operations, improving efficiency, and addressing financial challenges.
The company has announced structural changes to its business segments, leadership reshuffling, and cost-cutting measures as it seeks to streamline its global operations. This move comes as Chevron navigates cost overruns and delays related to its $53 billion acquisition of Hess, which has been stalled due to an arbitration dispute with Exxon Mobil.
Chevron reported earnings of $3.2 billion for the fourth-quarter of 2024, compared with $2.3 billion in the fourth-quarter of 2023. In 2024, Chevron’s earnings fell to $18.256 billion from $24.693 billion in 2023.
As part of this restructuring, Chevron earlier revealed its plans to lay off up to 20 percent of its global workforce by the end of 2026. This reduction aligns with the company’s broader strategy of cutting costs and optimizing its operations.
Chevron aims to save up to $3 billion through a combination of leveraging technology, selling off assets, and reorganizing workflows. These measures reflect the energy giant’s commitment to improving profitability in an increasingly competitive and complex industry landscape.
One of the most significant changes involves the restructuring of Chevron’s oil, products, and gas operations. The company will now operate these businesses under two distinct segments: upstream, which focuses on exploration and production, and downstream, midstream, and chemicals (DM&C), which handles refining, transportation, and petrochemicals.
Clay Neff, currently serving as the president of international exploration and production, will lead the upstream division effective July 1. Meanwhile, Andy Walz will continue to oversee the DM&C segment, ensuring continuity in the company’s refining and transportation operations.
Chevron Vice Chairman Mark Nelson will maintain oversight of the entire oil, products, and gas organization, reinforcing leadership continuity as the company undergoes this transition. Additionally, the company’s technical center will be reorganized, with Ryder Booth taking over as vice president of the new unit starting July 1. This restructuring is aimed at consolidating technical expertise and innovation under a more cohesive leadership framework, ensuring that Chevron remains at the forefront of technological advancements in the energy sector.
The company has also been making strategic geographic shifts. Chevron moved its headquarters from San Ramon, California, to Houston, Texas, a move that is expected to enhance operational efficiency and align with the company’s evolving business needs. The relocation also reflects a broader industry trend of consolidating major energy operations in Texas, which is home to a significant portion of the U.S. oil and gas industry.
Chevron has been expanding its global technological footprint, establishing a major technology hub in India last August. This center is set to become the company’s largest tech facility outside the United States, highlighting its commitment to leveraging global talent and resources to drive innovation.
Chevron’s restructuring comes at a time when the energy industry is undergoing rapid changes, influenced by fluctuating oil prices, geopolitical tensions, and increasing pressure to improve efficiency.
Baburajan Kizhakedath