The workforce at Chesapeake Energy just took a 13 percent hit. The Oklahoma City-based energy company announced Tuesday morning it had laid off nearly 400 workers, most located on the Chesapeake campus.
Doug Lawler, Chief Executive Officer for the company explained in a statement the layoffs were part of the firm’s strategy in recent years to cut debt and carry out divestiture of holdings and assets.
“Over the last couple years, we have divested approximately 25% of our wells, primarily from non-core areas, as a key part of our strategy to reduce debt, enhance margins, and work within our cash flow,” stated Lawler.
He went on to explain that the divestitures resulted in headcount reductions in the field while transition services agreements with buyers of some assets caused the company to not making staffing changes in Oklahoma City—-until now.
“As those transition arrangements have now come to an end,” said Lawler, “and we continue to see increased efficiencies across the company, we needed to respond accordingly.”
Lawler also said he plans to hold a Town Hall meeting in the coming weeks with employees to discuss the company progress. He signed his announcement to the workers, “Doug.”
The layoffs came just a few weeks after some investment experts wrote glowingly of Chesapeake and its production efforts. At least 330 of the employees who lost their jobs work on the Chesapeake campus in north Oklahoma City.
“CHK continues to improve oil and natural gas production in the Eagle Ford,” wrote Michael Filloon at Seeking Alpha. “Increased production may be due to increased lateral lengths, but the data shows the majority of the increase is due to better stimulation.”
Earlier, another investment adviser described Chesapeake trading as being in the “bull market.”
Giovanni DiMauro, also with Seeking Alpha wrote Jan. 15 that Chesapeake stock was up 20 percent and it was one of two stocks he was recommending.
“My other pick is Chesapeake Energy (CHK), which is up 20% since I recommended it in a December 13th article titled Buy The Shakeout,wrote DeMauro.
