U.S.-based shale oil and gas producer Chesapeake Energy plans to cut 15 percent of its workforce as it closes on new financing that will allow it to emerge from bankruptcy court protection next week, Reuters reported.
Chesapeake, once the second-largest U.S. natural gas producer, was felled by a long slide in gas prices. The company is resetting business to emerge a stronger and more competitive enterprise, Chesapeake CEO Doug Lawler said in an email sent to employees.
Most of the 220 layoffs will happen at the Oklahoma City headquarters.
Chesapeake on Tuesday said it planned to raise $1 billion in notes to complete its bankruptcy exit.
The company’s bankruptcy plan was approved by a U.S. judge last month, giving lenders control of the firm and ending a contentious trial.
Chesapeake filed for court protection in June, reeling from overspending on assets and from a sudden decline in demand and prices spurred by the coronavirus pandemic.
“As we prepare to conclude our restructuring, we continue to manage our business and staffing levels to adapt to challenging market conditions and position Chesapeake for sustainable success,” Chesapeake spokesman Gordon Pennoyer said.
People losing their jobs will be given severance packages and career assistance, according to Lawler’s email. The company’s headquarters was closed on Wednesday and workers were notified by phone about layoffs “because of the current health concerns known to all,” the email said.