Shares of Chevron ($CVX) are down at the time of writing after announcing plans to cut its global workforce by 15% to 20% by next year. This move is part of the company’s efforts to cut costs and improve efficiency as the U.S. oil major aims to achieve $2 billion to $3 billion in structural cost reductions by 2026.
The planned workforce reduction could affect up to 9,000 employees, based on Chevron’s global workforce of 46,500 at the end of 2023. The company is taking steps to simplify its organizational structure and execute its plans more effectively. This move is intended to position Chevron for stronger long-term competitiveness.
Nevertheless, Vice Chairman Mark Nelson acknowledged that the decision to reduce the workforce was not taken lightly and emphasized that the company will support its employees through the transition. Still, Nelson stated that responsible leadership requires taking tough steps to improve the company’s competitiveness, which will ultimately benefit employees, shareholders, and communities.
Is Chevron Stock a Good Buy Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on CVX stock based on 14 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After an 8% rally in its share price over the past year, the average CVX price target of $177 per share implies 13.2% upside potential.
