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Chesapeake Lays Off 15% of Workforce, Most at Oklahoma City Headquarters

Chesapeake Energy let hundreds of employees go Tuesday, most of them at its Oklahoma City headquarters, in the second major round of layoffs for the producer in two years.

Chesapeake said it had reduced its workforce by 740 (15%), including 562 in Oklahoma City. Following the layoffs, Chesapeake’s employee count will be about 4,000, including 2,500 in Oklahoma City.

According to an SEC filing made public late Tuesday afternoon, Chesapeake expects to incur about $55.5 million of one-time charges in the third quarter for the layoffs.

“Today, as part of our continued efforts to address the pricing environment head on, we released approximately 15% of our employees across all functions of the company,” CEO Doug Lawler said in an email to Chesapeake employees. “While this was extremely difficult, we are acting decisively and prudently to enhance the long-term competitiveness and strength of Chesapeake.”

Chesapeake shares closed at $6.79/share Tuesday, up 8 cents (1.2%) from the previous close of $6.71/share.

The last big round of layoffs at Chesapeake came almost two years ago, when more than 800 employees were laid off, most in Oklahoma City (see Shale DailyOct. 10, 2013).

Last month, Chesapeake announced that it had shuttered more natural gas production in Appalachia, sharply reduced the total rig count and was prowling for buyers or partners (see Shale DailyAug. 5). The Oklahoma City producer revealed a $4.02 billion loss (minus $6.27/share) in 2Q2015, versus profits a year ago of $145 million (22 cents). The company announced in July that it was eliminating its dividend and selling some onshore properties to cope with the continuing slump in natural gas and oil prices (see Shale DailyJuly 21).

The Chesapeake reports were in tune with recent announcements by others in the industry. Halliburton Co., the No. 2 oilfield services operator in North America, announced last week that it was sending out another round of layoff notices within the next two weeks, with most of the jobs lost, including management positions, to affect North America (see Shale DailySept. 24). Halliburton has already has laid off thousands of employees since the start of the year, with most of the positions lost in the United States.

Pipeline developer TransCanada Corp. also is laying off employees. In June nearly 200 people based in Calgary were given their walking papers. TransCanada, which employs about 6,000 in North America, now plans to lay off about 20% of staff in "senior leadership positions," a spokesman recently said.

Chevron Corp. said in July that it would lay off about 1,500 employees and 600 contractors across the organization, with most of the job losses affecting Houston (see Daily GPIJuly 29).

And oil and gas industry jobs continue to be eliminated in the Appalachian Basin as more companies -- primarily in the supply chain and oilfield services sectors -- announce broad layoffs that have left more than 1,500 people without jobs (see Shale DailySept. 23).

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