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EXCLUSIVE-Chevron to lay off about 25% of Noble Energy employees after merger

Credit: REUTERS/Mike Blake

Chevron Corp will lay off about 25% of Noble Energy's employees who joined the oil major after its $4.1 billion purchase of the smaller rival earlier this month, the company said on Tuesday.

By Shariq Khan and Jennifer Hiller

Oct 27(Reuters) - Chevron Corp CVX.N will lay off about 25% of Noble Energy's employees who joined the oil major after its $4.1 billion purchase of the smaller rival earlier this month, the company said on Tuesday.

The job cuts, which are on top of Chevron's plan to cut 10%-15% of its workforce, come after the company promised to lower its operating expenses by $1 billion this year in the face of sharply lower energy demand.

Most of the cuts will take place this year, Chevron said. Noble had about 2,300 employees at the end of last year.

Chevron's purchase of Noble boosted its investments in U.S. shale patches of Colorado and the Permian basin and gave the company a foothold in Israel through Noble's flagship Leviathan project, the largest natural gas field in the eastern Mediterranean.

The deal came at a time when drilling had been decimated by the coronavirus crisis, and since then oil producers across North America have continued to consolidate in hopes of surviving the downturn.

The company, which took a $1 billion charge earlier this year to cover severance payments, has also been in the process of asking employees worldwide to reapply for their positions as part of a cost-cutting program, Reuters reported earlier this month.

As part of the plan, Chevron also plans to lay off more than 50 employees starting Dec. 14 in both its Bakersfield production unit and the El Segundo refinery, according to a notice the company sent to the state of California.

About 700 employees will lose jobs in Houston starting this month, according to a filing with the Texas state.

Chevron had begun streamlining its operations at the end of 2019 when investor pressure was mounting on oil producers over their abysmal returns.

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(Reporting by Shariq Khan in Bengaluru and Jennifer Hiller in Houston; Editing by Sweta Singh and Saumyadeb Chakrabarty)

((Email: Shariq.Khan@thomsonreuters.com; Twitter: @shariqrtrs))

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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