Chevron (CVX) is undergoing a major operational overhaul aimed at cutting $2 to $3 billion in costs by the end of 2026. The company is moving away from its traditional regional structure to a model centered around global operational hubs. This strategy involves reducing the workforce by approximately 20%, affecting up to 9,000 employees worldwide.
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Centralized Hubs Aim to Cut Costs and Boost Speed
To drive these savings, Chevron is consolidating support functions into centralized service centers in Manila and Buenos Aires. These hubs will handle finance, HR, and IT operations that were previously scattered across various locations. Engineering functions are also being streamlined into two main centers: Houston and Bengaluru. The goal is to improve standardization, reduce duplication, and increase the speed of execution.
Vice Chairman Mark Nelson emphasized that the restructuring is designed to simplify decision-making and maintain Chevron’s competitiveness in a challenging energy market. He noted that reducing layers of management and unifying teams across borders will help the company act faster and operate more efficiently.
Layoffs Already Underway
A key part of the transformation is Chevron’s $1 billion ENGINE center in Bengaluru. Expected to be fully staffed by the end of 2025 with around 600 engineers, this facility is focused on advanced technology work. It supports areas like AI-powered geological analysis, machine learning for predictive maintenance, digital twin simulations of refineries, and real-time data systems. ENGINE is Chevron’s largest investment outside the U.S. and is seen as a key asset in reducing technical costs and expanding global capabilities.
Chevron’s restructuring plan is already in motion. Layoffs began in May, with 700 employees affected in Houston. Layoffs are also expected to follow in California and in Texas. Despite the cuts, the company is continuing to invest in strategic assets like the Permian Basin and Kazakhstan, while also preparing to integrate its $53 billion acquisition of Hess Corporation (HES).
The changes reflect a broader industry trend toward leaner operations, where efficiency and scale are key to navigating volatile energy markets.
Is Chevron a Good Stock to Buy Now?
The Street’s analysts rate Chevron a Moderate Buy, with an average CVX price target of $158.56. This implies a 3.62% upside.
