IT, Finance and Commercial are expected to layoff ~300 people in 2 waves starting with IT in early Q3 2025. A majority of operational support for IT will be moved to outsourced providers. Major IT restructuring will be done using the “spans and layers” concept suggested by BCG to reduce management layers.
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Next layoff will be late Q1 or early Q2, targeting April timeframe. That layoff will hit manufacturing and it will be deep and wide across all manufacturing sites. Once layoff is complete then a mass reorganization will take place.
@py4 I don't understand why Mommy and Daddy are not insisting on a leadership change. There's been a lot of internal frustration and concern over mismanagement of USGC II. Surely we haven't been able to sweep that under the rug.
I’m not an insider, nor am I an expert, but here are my thoughts for the mid to long term future. Every comment, even the pessimistic ones, are predicated on a mismanaged USGC II project. No one has talked about what happens when these projects are finished.
Here’s some options I foresee happening.
1a The projects go well and they repeat what they did with 1594 at Cedar and give the new unit all of the contract margin ethylene lbs. The expansion looks great but spot margins for the rest of the ethylene fleet get skull-fu---d and a lot of units go in the red financially.
1b The projects go well but they don’t move high value lbs to GTP so the expansion looks lack luster. Mommy and Daddy get pi---d and start demanding their money whatever it takes
2 the projects don’t go well… let’s not talk about that one
Anyone want to throw in some thoughts?
@p56 I'm not the original poster but you can see where this could be heading by looking at what Moody's did late last week — revised CPChem’s credit outlook from stable to negative. I asked ChatGPT about what it means.
Q: What does the negative outlook mean?
A negative outlook means Moody’s sees elevated financial pressure and will be monitoring how the company responds over the next 12–18 months. Note that they didn't downgrade our rating, just the outlook. Using a school analogy, our GPA remained the same, but the teacher is worried we're going through a tough time and not handling it well.
Q: Why did the outlook change? Who or what is responsible?
A: Moody’s identified 3 major contributors:
- External market conditions — a major factor (not our fault)
This is the single biggest driver and, obviously, we don't control that.
The global petrochemical industry is in a deep downcycle due to:
-- Oversupply of ethylene and polyethylene
-- Slower international demand
-- Softer export economics (we still sell products but make less money doing it)
-- Higher operating costs
This reduces margins for every petrochemical company, not just ours. - Large capital projects (shared responsibility between our owners and CPChem's leadership)
We're investing in several long-term, multi-billion-dollar projects.
These projects may be essential to company growth, but they also require significant up-front spending.
When paired with a weak market, this adds financial strain. - High cash distributions to Chevron and Phillips 66 (owner driven)
Moody’s specifically noted that CPChem paid large dividends to its owners during a period of lower earnings. This was flagged as a “governance consideration.”
Bottom line (no pun intended):
The market created the squeeze. Our investment commitments and dividend levels added additional pressure. CPChem did not react quickly enough to manage the downturn.
Q: Is the company in financial trouble?
A: No.
A negative outlook is not a sign of instability.
It means Moody’s wants to see how we adapt to the current environment and balances investment, debt, and cashflow.
Q: What does this mean for CPChem’s business outlook?
A: We can expect:
— More focus on cost discipline
— Careful pacing of major projects
— Ongoing monitoring of debt and liquidity
— Continued discussions with owners about capital priorities, including dividends
But day-to-day work continues as normal.
Q: Should employees be worried?
A: CPChem has completed two rounds of layoffs, and the LT has said no more layoffs are planned. That could be true for the present time, but these market conditions are expected to continue through 2027 and there are actions the owners and CPChem leadership could take or fail to take that might make things worse.
Q: What needs to happen next?
A: We should be focusing on:
— Operating safely and reliably
—Protecting cash flow
—Managing capital projects with more financial restraint
—Engaging with owners and credit agencies
—Being transparent with employees as the situation evolves
Of course, I'm no expert, as you can tell, and ChatGPT can be wrong. So please correct any misinformation or misunderstanding you see here.
My bottom line as an employee: Less panic but still in wait and see mode. I don't have 100% confidence that LT or the owners will fix things in time to avoid a rating downgrade or future layoffs over the next 18 months. Based on their past behavior, I don't expect transparency as conditions evolve. But if you've survived 2 rounds and still have a job, there's room for hope for this once-awesome company.
@p83, Pasadena?
Will we see some plants get sold off Dec25/ 2026?
Just watched the reflection video, RT guys were also let go? twice? Didn’t realize that, thought just IT, Finance, commercial…
@OP The original post of this thread accurately said what was going to happen in 2025. Original Poster, please tell us what is in store for 2026!
@nxz CPC is not smart enough, definitely not strategic enough, and not engaged enough to play in the same league as an Enron. Like comparing peewee football to the Dallas Cowboys. That doesn't mean CPC's LT/LTE are not evil enough if given the chance. CPC is a gravy train. What people at the upper management level are all about is taking advantage of working in a lucrative industry and all the financial and lifestyle perks that come with it. We all do that, right? But I'm talking about spending every 8-hour day substantially focusing on maintaining or improving your personal financial and power position over the needs of the company and its customers and employees. These folks are 10 out of 10 in this only for themselves and make decisions on that basis. The lavish golf tourney and HQ grand opening celebration were for THEM, their perks, not yours. The layoffs may be justified, but they are also very much about crafting a specific culture that removes obligations — like employee recruitment, development and retention and programs and departments designed to support that — and critical input from employees who question or want to give input on their business decisions. Outsourced services are staffed by people who are not engaged in CPC culture, couldn't give a rat's a** about things like iCare and DEI or public opinion and regulatory pressures on the company. This new culture is designed to support nepotism and the rise of unqualified people into positions of authority throughout the company. They have a strong shared belief system that is incompatible with a healthy workplace and a culture of excellence and service. In other words, they d-mb and selfish and they thrive on your envy and desire to join their ranks of insiders.
@nxf As someone that actually worked for Enron, I agree...CPC is not Enron, so just stop. Your pension is safe. This is just a downturn in the market and CPC is adjusting. I did get laid if in round 1. I don't agree with all their current decisions or some people leading the company, but I do understand. Su-k it up and move on.
@nxe I have asked this very question repeatedly! Why? Non-revenue producing department- so top heavy - business partners?? There is no one left to partner with! As of March ‘26 there will be even less! So ridiculous
@nwj CPC is hardly Enron
Can someone explain to me how HR, the least valuable group in the company, hasn’t had any downsizing? Do we really need this many former sorority girls who do nothing but gossip, flirt with management, and threaten our jobs? Make it make sense!
@nsv Enron did.
@np5 spoken like a true outside retirement financial planner.CPChem is nowhere near bankruptcy and pensions are safe. Think about this, would the LT make adverse pension decisions when their own pensions would be affected as well?
Get your money before it's too late.
Do you really want to rely upon the words "Generally" or A company "MAY" choose to continue it's pensions if restructuring is successful to prove your point?
If CPChem kept your pension annuity but eliminated lump sum payouts, how would that impact your planning?
Key Factors That Determine Impact
- Type of Bankruptcy
- Chapter 11 (Reorganization): The company may continue pension obligations if it restructures successfully.
- Chapter 7 (Liquidation): Pension plans are more likely to be terminated, triggering PBGC involvement.
Will we be seeing a Q1 sales of Specialty Chemical and Drilling Specialties business?
Wave one was over several months too - IT, HR, some expats
Wave two is over several months - Finance, marketing, logistics, coordinators, other. If I received a call via teams, I would not be embarrassed walking out of the plant or office. If I was told in advance six months from now, that’s a long time to carry that loss, but I could look for a job with the options. Either way, not easy. I know it hurts because we have or had it so good for so long. It is lonely watching others leave. I am feeling the loss too. We have several rehires here and hope to see some people back when the market improves if I am still here. Prayers
@n1a I'm sure there will be a wave every quarter. They're gearing up to sell. Skin the company to bare bones and sell. The new buyer will clean house after that. This isn't over.
@n39 Generally, bankruptcy filing protect companies from their creditors, but that doesn't include pensions. Pension assets are held in trust outside company assets and cannot be taken by insolvent companies or their lenders.
@n39 while I agree with you regarding the “fat” please refrain from spreading incorrect rumors regarding the pension not being paid out of CPC files for bankruptcy. This is blatantly false.
I believe the pension is ~97% funded currently. If CPC files for bankruptcy which I highly doubt they ever would, the vested pension benefits are largely protected by federal law through the Employee Retirement Income Security Act (ERISA) and the Pension Benefit Guaranty Corporation (PBGC).
This is not 2001 and the protection was largely brought upon due to the Enron debacle where most employees and retirees lost all their pension. You should be thankful that your pension is safe.
With that said, I do agree, if you get laid off, pull all of it out immediately and roll it into an IRA where you can manage it yourself.
@mzc
Interesting that all the people who knows how everything works is called fat. Just because they are 59+ years old. Yes they make good money and it's because of the value they bring everyday. So, the fat is gone and replaced by entry level skinnys, who have to troubleshoot from Mumbai. Personally, I have taken my retirement, pension and other benefits and have not looked back. Chapter 11 is next, and so with it will be all pension accounts. Like many other companies, your payout after bankruptcy will be less than a $1000. If you are smart, and retirement eligible, retire now or lose your $2.5 million lump sums.
@n2p the foundation for this downfall was laid under the Chinn regime: DEI push, 2 mega projects green lighted, incompetent LT installed, etc…. And which scandal are you referring too?
I wonder how Bruce Chinn feels about this downfall- including the scandal? It seems like it all went downhill after he retired.
@n1a At least one if not 2.
How many rounds in 2026? Chevron just double/ triple their cost reduction targets.
More Caring by Choice at work - “we are holding your severance hostage while you train your replacement!!” Excellent business decision to outsource customer service abroad. How long will it take for customers to get frustrated while they have to way a day or longer for a response due to time zone changes?? Just a matter of time before they go to your competition who has customer service stateside. Oh not to mention you still keep all of HR and no layoff any of them so they continue to bury all the skeletons.
@mzb The fat is not at the bottom.
@mzb Sorry, meant to say 3rd wave is late Q1 or early Q2 ‘26
@mys Sure. The 1st wave was to trim the fat and mainly targeted IT and also older commercial people at HQ (tenure=larger salaries).
The 2nd wave included some immediate layoffs but was mainly to offshore support services at HQ such as customer service, marketing aides, financial services, etc. They have until April 1st because you have to train your replacement to be eligible for severance.
The 3rd wave will be manufacturing to once again cut more fat. These will be immediate layoffs as they will be reorganizing groups with no replacements. These layoffs will most likely happen late Q3 or early Q4.
Hope this helps and good luck!
Can someone please break it down for me the main differences between the 1st wave and the 2nd wave? It sounds like the 2nd wave has a longer transition period until April 1st while the 1st wave only had 30 days? Just trying to be mentally prepared for what the 3rd wave would look like. Thank you all for your inputs. This forum has been more helpful and informational than any leader(s) could be.
@mxj thanks for the info and congratulations!
@mwk I was impacted on first round of layoffs and didn't use them. I just didn't see the value in using them versus doing it myself. I have already found a job by the way. Also, beware, they will hound you for weeks on end, so just ignore the calls if you don't want to use them. Good luck!
Has anyone used the outplacement service? Curious if it's worth it?
Just remember that the strategy being followed is similar to Chevron and P66 have done with BCG. We have paid them exorbitant amounts of money to tell us how to right size CPChem. They are using the same play book they have with others in the industry. It’s not right or wrong. It’s just one direction. Ultimately both owners want to see reductions because they had reductions and pain must cross all the lines. This is formulaic and not personal from the BCG end, but for CPChem employees it is personal. Therefore you face a unique dichotomy of rationalized thoughts. The reality is the company made some bad choices like doubling down on ethylene and polyethylene in a slumping market and not going after other promising areas in other businesses. We also could have just done one mega project and not two. Maybe we could have added derivatives. Purchased a company. But until CPChem is no longer owned by two competitive oil companies, we will always face unique funding and growth challenges.
@mgs Not so sure they met their numbers. Maybe in "value" but not in $$$$'s. It has cost COChem a tremendous amount of money with Severance, retirements, subsidized Cobra health care, RRA accounts, unemployment benefits and the hit they will take for the layoffs and the tremendous amount of soft costs for outsourcing decisions.
They have spent waaay more to kick people to the curb than it ever would have costs to keep them.
Sure, write it off as a loss this year, but it would have been a lesser loss to stay the culture course.
Prove me wrong?
@mnf careful you sound like an employee or ex employee with a lot of common sense. Lots of ignorance on here blaming people for placing the blame on the leadership.
If they dont deserve the blame who does?
@mn7 It obviously never occurred to ELT to forgo the spending on new HQ celebration just before 1st round, all the frivolous spending leading up to 2nd round while they were planning on devastating lives! Caring would've meant doing what some companies have done to spare people from layoffs. If you're really serious about saving and looking for solutions you make hard choices like freezing 401k, EIP & AIP bonuses, annual merit increases, etc. and anything else you can pause until you're able to stop seeing red! It might not always be the answer, but it saves jobs and people RESPECT you for it, rather than worst case scenario of resorting to layoffs. This trend reflects a broader strategy among businesses to manage financial pressures while trying to retain their workforce. If others can do it...it's a shame CPC caved to pressures from parents and our feckless ELT didn't stand up for anyone!!
@mn3 Why do they need that giant waste of space in the Woodlands? Other companies are working from home just fine and renting out space when they need to meet. Restrictions that apply to the plants should apply to corporate. I' referring to the layoff parties you have been hosting. It's disgusting display of how little you care about those who got let go. Disgusting!
In the spans and layers model, once layoffs are done (rightsizing), the company will need to reorg. That means at some point managers and leaders (especially middle level managers) will need to go or be repurposed. Since at CPChem being capable at your job is not important to be a manager (knowing people and being agreeable is), there will be a reshuffling of the remaining few to fit the new standard: 1:6 or one manager to six reports. There will be demotions and changes for those that choose to stay. And eventually there has to be an elimination of one or more SVPs, VPs, GMs or other fancy titles and useless layers that will cause more money to be saved. Some of those big wigs will get the memo and retire, while others will get bonuses to stick around until the ship sinks. Either way, they're not losing.
Don't be fooled... they're not done. Since profitability is not there the owners will start intervening and making a radical change of Leadership. The drop in our credit rating and one dishonorable mention of CPC's disappointing results on CVX Q325's earnings call (CPC driving downstream results down) already has pulled more unwanted attention to our board and will hopefully trigger a drastic change in leadership. Which in normal companies, that is what is done FIRST. Leadership got us here; they should be the ones going out first. As we continue to struggle financially, I hope they recognize job cuts will not fix the problem. CPChem bleeds money every day through incapable people leading (both technically incapable and awful leaders) and pushing ideas that are stupid and costly instead of caring to win and creating wealth by taking sound business decisions. My heart goes out to all those laid off and hope you find your next gig soon. I just hope we don't go down the path of Chapter 11. That would really su-k.