Chevron makes more cuts as oil slump saps profit

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SAN RAMON, Calif. — Chevron Corp. said it’s cutting about 10 percent of its workforce amid the worst oil-market slump since the 1980s even as the company posted third-quarter profit that surpassed analysts’ expectations.

Chevron said in a statement Friday that it will eliminate 6,000 to 7,000 jobs, the deepest cuts since the 2001 Texaco merger that created the company in its modern incarnation. Those numbers include a workforce reduction of 1,500 announced earlier this year.

The company earned $1.09 a share, 33 cents more than the average of 21 analysts’ estimates compiled by Bloomberg. Profit from refining oil into fuels jumped 59 percent to $2.2 billion. Spending in 2016 will be 25 percent less than this year, said Chevron Chairman and Chief Executive Officer John Watson in the statement.

“The concern for investors has been that they’ve been outspending cash flow, so anything they can do to alleviate those concerns will be looked upon favorably,” Brian Youngberg, an analyst at Edward Jones in St. Louis, said in an interview.

The price of Brent, the benchmark crude used by most of the world, declined by half since June 2014 to an average of $51.30 during the July-to-September period. After a brief rebound, oil entered its second bear market in a year after an avalanche of supplies from U.S. shale fields and the Persian Gulf flooded markets at a time of faltering demand growth in China and other developing economies.

“We expect further reductions in spending for 2017 and 2018,” Watson said.