Things aren’t looking good for Chesapeake these days and now the trouble has filtered down to its workers. Bloomberg BusinessWeek reports the company announced layoffs in Texas on Tuesday, handing out pink slips to 70 employees. That amounts to just 8 percent of its workforce in northern Texas, and an even smaller percentage of its 13,000 workers nationwide, but as Businessweek reports, it comes as the company struggles with low cash-flow and high debt.
“The layoffs are Chesapeake’s first since 2009. They are “not a surprise, given historic low natural gas prices and our company’s strategy to redeploy assets to more economically promising fields,” Chesapeake said in a letter to employees announcing the layoffs. Chesapeake currently has two drilling rigs in the North Texas area, which is home to the natural gas-rich Barnett Shale, down from 44 rigs in 2008, the company noted.”
Chesapeake’s business practices have also come under scrutiny, with the state of Ohio revealing last week that it’s investigating the company for fraud. Chesapeake operates about 200 producing natural gas wells in Pennsylvania, and has racked up about 200 violations. The company says it will focus more on the lucrative, liquid rich gas holdings in places like southwestern Pennsylvania, and less on the “dry gas” found in the northeastern part of the state.