Chesapeake Energy has announced it will lay off hundreds of employees as the debt-burdened natural gas driller continues to overhaul its business.
In a letter to employees, Chesapeake said it will let go about 13 percent of its workforce, which stood at 3,247 people as of September. A company spokesperson confirmed the Oklahoma City-based company would trim back about 400 positions.
The layoffs will occur primarily at Chesapeake's Oklahoma City campus.
Chesapeake CEO Doug Lawler said the job cuts were the result of asset sales that the company has made in recent years. He explained that Chesapeake did not initially cut staff after selling the assets because it had entered into transition arrangements with buyers, which required workers to remain in their positions.
However, with those arrangements coming to an end, Chesapeake needed to "respond accordingly," Lawler said in the letter.
"The decision to reduce headcount did not come easily for the leadership team. Dedicated, value-driven, hard-working people have been affected," he said.
Chesapeake rose to prominence under founders and shale drilling pioneers Aubrey McClendon and Tom Ward, who borrowed heavily to buy vast swaths of land to produce natural gas.
The company has sold off about 25 percent of its wells in recent years in order to shrink its debt load, improve profit margins and operate its business within the confines of its cash flow, Lawler noted in his letter.
Shares of Chesapeake were last down 5.4 percent on Tuesday. The stock has fallen about 43 percent over the last year.