Layoffs, reorganization and offshoring that are in plans are costly and will have a far-reaching impact. Low labor costs are not exactly a critical ingredient of successful business. It's ironic for a company with no growth plan and no ideas for the future to embark on such an endeavor.
15 replies (most recent on top)
Slimming down and selling off large chunks of the company to prep for a sale, likely to Exxon.
Getting ready to sell
It may finally be a good opportunity to get read of all those walking deads in CTC
So they can cut spending and have more $$$ for stock buybacks.
Yes, this is correct. Opening a new office is a huge distraction, we need to focus on exploration and making money, and get rid of some pretty hopeless folks that do nothing to contribute to those core things.
If we desire to do R&D or speculative lower carbon investments, make sure the people doing R&D or speculative low carbon investment have the chops to be doing that kind of activity, there are a lot of stupid di-kheads running the show today that couldn't build a business plan if their life depended on it.
This is something that would take competent and engaged executives, we don't have those, so Engine is the result.
Simple fact is that Chevron needed to do something. Their operating model is uncompetitive. To try to do the same things and expect different outcomes would be folly.
The shift of work to India may come to be a folly as well. However, it at least attempts to address cost non-competitiveness. Sticking their heads in the sand doesn't resolve the issue.
Now, I personally think that the right solution is to skip the whole charade and make the 30-50% cuts without Indian backfill. Chevron has a lot of people who do little, and a lot of processes which do not create value. Push the org until you find what "breaks", then hire back a few people.
Pay no attention to the man behind the curtain with no plan.
The real point of the exercise is to make McKinsey more money.
Nah it’s about Indian executives wanting to send jobs back to their home country.
It's difficult to compete on deals when your DCE costs are 20% above peers, LOE schedule 35% above peers, and G&A burden 50% above peers.
Same goes for bidding to a return on an exploration block, concession farm-in, or any other BD effort.
The same as most layoffs. To clear out a lot of the deadwood so that the rest of the people who really want to work and are capable will not be held back by the riff-raff sitting around doing nothing and not contributing.
To the original question raised in the thread, if it takes $10 in US versus $1 India to do the same non-critical work of more or less the same quality, where would you go?
Good points, OP. Chevron is like a ship aimlessly floating in the ocean.
I'll just just take their women like they took our jobs. Balanced, all things should be.
I disagree. MW is going to find India more than capable. This will turn out to be the beachhead. Prediction: CVX headquarters will be in India within ten years. Brush up on your Hindi, Bros and Brochettas!