Chesapeake Energy Lays Off 800 Employees
Chesapeake Energy on Tuesday laid off about 800 employees, including 640 from the company’s hometown of Oklahoma City.
As The Oklahoman’s Adam Wilmoth reports, the layoffs ended “months of uncertainty” at the natural gas giant, where new CEO Doug Lawler was being pressured to reduce costs and increase profit:
Lawler spent most of the day Tuesday speaking with Chesapeake employees. He also contacted Gov. Mary Fallin and Oklahoma City Mayor Mick Cornett.
“I mainly wanted to highlight to them that it has been a difficult day for us, but that our commitment to the state and city is as strong as ever,” Lawler said.
In 2012, Chesapeake’s shareholders ousted the board and Aubrey McClendon, the company’s founder and CEO, whose personal financial dealings had been questioned by reporters and federal regulators.
Lawler, a former executive at Anadarko Petroleum, took over in June 2013.
From The Oklahoman:
After Tuesday’s cuts, Chesapeake has about 11,000 employees nationwide, including about 6,000 in Oklahoma — 3,500 at its Oklahoma City headquarters.
Here’s the full text of the letter CEO Lawler sent to employees on Tuesday:
From: Doug Lawler
Sent: Tuesday, October 08, 2013 3:06 PM
Subject: Conclusion of Organizational Restructuring
Dear Chesapeake Employees,
As I have previously shared, I joined Chesapeake Energy last June because of my confidence in the employees, the assets, and the company’s great potential. The unique combination of talent and resources within Chesapeake provides the foundation for what I believe can be a top-performing E&P company in North America.
The past few months have been very challenging as we have evaluated the competitiveness of the company. As we go forward and execute our strategies of 1) Financial Discipline and 2) Profitable & Efficient Growth from Captured Resources, we will position Chesapeake to be a sustainable, enduring enterprise, and provide the basis to achieve the leadership role in the E&P business that this company can deliver.
The organizational restructuring targeted to be complete by November 1 has concluded, and the initial transformation work is finished. By scaling E&P support services, reducing management layers, and aligning resources with a sharpened focus on accountability and efficiency, we have created a business built to deliver a sustainable and profitable future. As a result of the restructuring, approximately 800 employees – in various groups including Land, Operations, IT, HR, Legal, Facilities, A&D, Finance and Accounting – were informed today that they will be leaving the company.
We are grateful for the contributions of each employee impacted by the work force reduction. It was important to me that we took careful, diligent steps to evaluate our organization and to make sure each affected employee was treated with dignity and respect. In that regard, we offered eligible employees a severance package which included three months’ pay, 100% acceleration of equity, a lump sum COBRA payment, and outplacement services. This reduction in force completes the reorganization process I outlined in June.
I would like to extend a special thanks to the transformation teams that have worked tirelessly the past few months in evaluating all aspects of our business. More than 75 cross-functional leaders have dedicated significant time, energy and effort toward our goal of becoming a top-performing E&P company.
I am very excited about the future for Chesapeake, as we are a healthy, strong and resilient company that is poised to grow for decades to come. We will honor our core values and work diligently to execute our strategy. We are known for being a great place to work, and with your support and commitment, we will also be a great business and a great investment.
Please join me tomorrow for an all-employee Town Hall which will be webcast live and posted on MyCHK. If you are unable to attend in person, you can submit your questions to TownHallMeeting@chk.com.
Chief Executive Officer