Chesapeake Energy (NYSE:CHK) is set to lay off approximately 400 employees in an attempt to relieve debt and overhaul its business.
On Tuesday (January 30), the company, which stood at 3,247 people as of September, sent a letter to employees informing them of its decision to release 13 percent of its workforce.
According to Chesapeake, the majority of those cuts, which are the result of asset sales that the company has made in recent years, will come from its Oklahoma City campus.
In the letter, Chesapeake Energy CEO Doug Lawler stated that Chesapeake did not initially cut staff after selling off assets because it had entered into specific arrangements with buyers, and they required workers to remain in their positions.
With those arrangements coming to a close, the company must now respond accordingly. “The decision to reduce headcount did not come easily for the leadership team. Dedicated, value-driven, hard-working people have been affected,” he said.
In recent years, the company has sold off approximately 25 percent of its wells, which Lawler said was an effort to “[r]educe debt, enhance margins, and work within our cash flow.”
This isn’t the first time that Chesapeake has made substantial cutbacks. In 2015, Chesapeake let go of approximately 750 of its employees, citing low commodity pricing as the reason.
Chesapeake’s share price was last down 3.9 percent on Friday (February 2), and the stock has fallen about 43 percent over the last year.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.