Chevron Corp. is cutting up to 7,000 jobs, or 11 percent of its workforce, as it deals with lower oil prices that are cutting deeply into profit.
The San Ramon-based company said Friday that it would cut capital and exploratory spending next year by one-fourth, with further cuts in 2017 and 2018 depending on the oil industry's condition then.
Chevron has not yet decided where the cuts will be made.
"With the lower investment, we anticipate reducing our employee workforce by 6-7,000," Chairman and CEO John Watson said in a statement. Chevron has 64,700 employees, according to a spokesman.
With lower prices for the oil and natural gas that it produces, Watson said the company was "focused on improving results by changing outcomes within our control." He said operating and administrative costs were 7 percent lower than last year, and further reductions are likely.
Watson said the company has raised $11 billion by selling assets in the last two years, and it could generate another $5 billion to $10 billion in sell-off gains by the end of 2017.
Cheaper energy prices were key to 64 percent drop in third-quarter profit at Chevron, the nation's second-biggest oil company behind Exxon Mobil. Oil prices have fallen from over $100 in June 2014 to under $50 this month.
Chevron said that third-quarter earnings plunged to $2.04 billion, or $1.09 per share, down from $5.6 billion, or $2.95 per share, a year ago. The latest results still beat Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for 79 cents per share.
Revenue fell 37 percent to $34.32 billion despite an uptick in production. Five analysts surveyed by FactSet expected $27.70 billion.
In morning trading, shares of Chevron rose 67 cents to $90.56. They began the day down 20 percent since the beginning of 2015, while the Standard & Poor's 500 index rose 1.5 percent.