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Chesapeake Cuts 740 Positions for Better Cost Efficiency

Per a SEC filing Chesapeake Energy CorporationCHK announced that it has cut 15% of its entire workforce. The company continuously strives to combat the volatile commodity price environment by making its operations more cost effective, and the drastic step reflects the same. Though the stock gained initially, it fell marginally during after hour trading.

560 employees out of the total of 740 fired are from the company's headquarters in Oklahoma City. The personnel who lost their jobs will get 13 to 52 weeks of pay in accordance with their age, pay level and years of service with the company. The company will also provide them health insurance and job placement assistance.

Per the regulatory filing, Chesapeake will have to pay a one-time charge of about $55.5 million in third-quarter 2015 due to these layoffs. These expenses will include employer payroll taxes and will be paid in cash.

According to the corporate fact sheet, the company had 5,500 employees as of Jan 1, 2015. After the retrenchment, Chesapeake will now have about 4000 employees nationwide. More than half of the company's current employees will work at the Oklahoma City headquarters.

The reduction in headcount is in sync with the company's plan to cut costs and better align its workforce with the needs of the business and prevailing oil and natural gas commodity prices.

Chesapeake is an independent oil and gas company engaged in the acquisition, development, and production of onshore U.S. natural gas resources. The company has grown rapidly and is now the second-largest natural gas producer in the U.S. It is also the eleventh-largest producer of oil and natural gas liquids in the U.S. Chesapeake is noted for growth by acquisition. The company has also demonstrated considerable drilling prowess, capitalizing on its extensive inventory of acquired undeveloped acreage to make substantial reserve additions.

Chesapeake carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are Alon USA Partners, LP ALDW , Braskem S.A. BAK and ReneSola Ltd SOL . All these stocks sport a Zacks Rank #1 (Strong Buy).

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CHESAPEAKE ENGY (CHK): Free Stock Analysis Report

RENESOLA LT-ADR (SOL): Free Stock Analysis Report

BRASKEM SA (BAK): Free Stock Analysis Report

ALON USA PTNRS (ALDW): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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