The energy exploration company said on Tuesday that it plans to slash about 15% of its workforce, or 740 employees.
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The cost-cutting moves will cause Chesapeake to take a one-time charge of about $55.5 million in the third quarter related to employer payroll taxes.
“As you are fully aware, the current commodity price environment continues to be a challenge for our industry and for Chesapeake”, CEO Doug Lawler wrote in an email to employees, according to the Journal.
Chesapeake Energy is aggressively eliminating jobs as it wrestles with cheap oil and natural gas prices. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more hard for investors to achieve positive results compared to most of the stocks we cover.
Mr. Lawler has reined in spending, but plummeting oil and gas prices continued to take a toll on the company, along with many other American energy producers. Shares of Chesapeake were down 0.2% in after-hours trade after closing 1.2% higher to $6.79 during the regular session.
Chesapeake has not provided a comment about workers in other locations.
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In July, Chesapeake also announced that it would stop paying a quarterly dividend for the first time in 14 years because of low commodity prices. The boldest deal of this sort came a year ago in October 2014 when Chesapeake struck a $5.38 billion deal to sell a significant piece of itself to rival driller Southwestern Energy Corp. Baird upgraded shares of Chesapeake Utilities from a “neutral” rating to an “outperform” rating and set a $52.00 price target for the company in a report on Monday, August 10th. Wells Fargo Securities estimates the company will outspend discretionary cash flow by $1.3 billion in 2015.
