Masses of employees were seen leaving the Chesapeake Energy campus in Oklahoma City on Tuesday morning after a 15% cut.
Approximately 19% of Chesapeake employees in OKC were laid off, a total of 562; 15% of the entire company was let go, a total of 740 all told.
In a letter to Chesapeake employees, CEO Doug Lawler, wrote: "As you are fully aware, the current commodity price environment continues to be a challenge for our industry and for Chesapeake. Over the past year, we have taken significant actions in response to the low commodity prices by reducing our costs and decreasing our capital spending."
He went on to say, "Today, as part of our continued efforts to address this pricing environment head on, we released approximately 15% of our employees across all functions of the company. While this was extremely difficult, we are acting decisively and prudently to enhance the long-term competitiveness and strength of Chesapeake."
The dismissed employees who are eligible will receive severance packages and career transition/placement assistance.
In 2013 the company laid off 640 workers from its Oklahoma City HQ, and 800 in all.
While the industry downturn can be blamed for today’s layoffs, and other redundancies seen across the oil and gas sector, more and more companies will be forced to merge or sale before the end of the year. Many industry leaders have resisted the downturn, only to be forced to capitulate as the oil and gas economy darkens. Fortunately there are some who predict a turnaround, while others have accepted the current price environment as a new reality.
Chesapeake now claims approximately 4,760 employees on its website, with 2,638 of those employees in Oklahoma City. Chesapeake is the 11th largest employer in the area according to the Greater Oklahoma City Partnership.
Chesapeake is the second largest producer of natural gas and the 11th largest producer of oil and natural gas liquids in the U.S.
Lawler stated that Chesapeake will remain focused on building an eduring, resilient and profitable enterprise, "one that can flourish in any commodity price environment."
In August the company reported a second quarter loss of $4.11 billion after reporting a profit in the same period a year early. Chesapeake stock is currently trading at $6.79, with a 52-week high of $25.42, and a low of $6.01.