Chesapeake Energy has announced its plans to axe 400 jobs, equal to around 13% of its workforce as part of its efforts to cut down costs.
An email sent by the company’s Chief Executive Doug Lawler to employees indicates that the job cuts are mostly restricted to the headquarters in Oklahoma City.
As of September, the company employed around 3,250 people.
The email reads: “The decision to reduce head count did not come easily for the leadership team. Dedicated, value-driven, hardworking people have been affected. You have my personal assurance that we are treating these employees fairly, respectfully and with considerable effort to assist them with their personal and career transition.”
This decision comes at a time when Chesapeake is planning to raise cash to cut down its $9.9bn debt.
According to Lawler, most of the job cuts were a result of the asset sales. After selling the assets, the company did not reduce staff count due to transition agreements with purchasers. However, these agreements are now coming to an end.
Chesapeake draws more than 50% of its revenue from natural gas. However, the recent past has seen the company being under pressure due to low gas prices.
Gas prices are expected to dip further as the Environmental Impact Assessment (EIA) indicates that natural gas production in the US is expected to grow by 6.9 billion cubic feet per day in 2018, which is the highest increase from last year.
Chesapeake took heavy loans to acquire vast tracts of land to produce natural gas. In recent years, it divested around 25% of its wells to reduce its debt and boost profit.
