Chesapeake cuts 15% of workforce as oil rout deepens

OKLAHOMA CITY (Bloomberg) -- Chesapeake Energy Corp., the U.S. natural gas explorer selling assets to raise cash, plans to cut 15% of its workforce to cope with a drop in commodity prices.

The company, based in Oklahoma City, will lay off 740 people and take a $55.5 million, one-time charge in the third quarter related to employer payroll taxes, according to a filing Tuesday.

"While this was extremely difficult, we are acting decisively and prudently to enhance the long-term competitiveness and strength of Chesapeake," CEO Doug Lawler said Tuesday in an internal memo sent to Bloomberg News. "Over the past year, we have taken significant actions in response to the low commodity prices by reducing our costs and decreasing our capital spending,"

From the combination of spinoffs, asset sales and other cuts, the company’s workforce fell by almost half last year to 5,500 by the end of 2014, according to data compiled by Bloomberg. The biggest effect from Tuesday’s eliminations will be seen in its hometown, where 19% of its headcount there will be let go, Gordon Pennoyer, a spokesman, said in an email.

Energy companies around the world have eliminated more than 150,000 jobs after oil prices fell by more than half since from their June 2014 peaks. Natural gas prices in the U.S. have tumbled 42% since November.

The filing was made after the close of regular trading in New York, where the stock settled 1.2% higher at $6.79. Chesapeake, which has 7 buy ratings from analysts, 20 holds and 8 sells, dropped to as low as $6.69 in after-market trading.