Chevron has announced a significant plan to enhance its cost efficiency by reducing its workforce by 15% to 20%. This decision was officially revealed on Wednesday.

The layoffs will commence this year, with the majority expected to be finalized by the end of 2026. Chevron aims to achieve cost savings ranging from $2 billion to $3 billion by the end of next year.

“We do not take these measures lightly and are committed to supporting our employees during this transition,” stated Chevron Vice Chairman Mark Nelson. “However, responsible leadership necessitates making these tough decisions to enhance our long-term competitiveness for our employees, shareholders, and communities.”

Following the announcement, Chevron shares experienced a dip of about 1% on Wednesday, even though the stock has seen an increase of roughly 8% this year.

The company fell short of Wall Street’s fourth-quarter earnings forecast, reporting a loss of $248 million in its fuel division, in stark contrast to a profit of $1.15 billion in the same period last year, largely due to declining refining margins.

Additionally, Chevron’s pending $53 billion acquisition of Hess Corp is embroiled in arbitration with rival Exxon Mobil, adding further uncertainty about the potential closure of the deal.