Chesapeake announced Tuesday that it is slashing 15 percent of its manpower, mostly from its headquarters in Oklahoma City.
The energy exploration company is reportedly cutting jobs aggressively while it continues to struggle with the dwindling price of natural gas and oil. Crude oil has plummeted to $45 a barrel from its $100 a barrel rate in June of last year, CNN Money has learned.
Company CEO Doug Lawler told employees via a memo: "We must remain focused on building an enduring, resilient and profitable enterprise — one that can flourish in any commodity price environment."
While the decreased price of oil is music to the ears of American drivers, companies such as Chesapeake Energy suffer losses that are irreparable at some point, pressuring them to resort to cutting jobs from their workforce.
The job cut Chesapeake Energy announced will affect 740 employees, and the company will have to settle up to $55.5 million of employer payroll taxes.
Despite the layoffs, its Oklahoma headquarters will still have 2,500 workers, and the company, overall, will still have 4,000 employees, as per Washington Post.
The layoffs are seen as Chesapeake Energy's means of cutting costs now that it is wrestling with its challenging commodity price.
"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," Lawler noted in the same memo.
In the second quarter, Chesapeake already reported a huge loss worth $4.11 billion, Koco.com reported.
Chesapeake Energy is not the only Oklahoma-based energy company to eliminate a portion of its manpower in the wake of substantially low natural gas and crude oil prices.
SandRidge Energy laid off over 100 people from its Oklahoma-based headquarters, decreasing its workforce by 20 percent.
City Governor Mary Fallin said she's said of these job cuts but clarifies that she does understand that the energy prices in Oklahoma is what's putting energy companies down.
"Oklahoma does get hit because we've had such a rich resource in oil and gas. It helped to build a strong economy. But now we're seeing a downturn," Fallin said.
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