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Chesapeake chairman says company has too many employees

Chesapeake Energy Corp. plans to finalize layoff plans by Nov. 1.
by Adam Wilmoth Published: September 20, 2013

In the midst of layoffs, Chesapeake Energy Corp. Chairman Archie Dunham on Thursday praised CEO Doug Lawler for his efforts to streamline the company.

“I think it's very positive he's reaching out and talking to all the leaders in the organization to determine who our best leaders are, our most capable leaders, people with the highest potential in the company,” Dunham said. “I have all the confidence in the world and the board is totally confident in his leadership and what's taking place.”

Dunham was in Oklahoma City on Thursday for a Chesapeake board meeting and to speak at the Oilfield Prayer Breakfast.

“It's really hard when you're going through a tunnel of change to see the light at the end of the tunnel,” he said. “I think Doug has acted very aggressively to move forward to try to get the company through the tunnel as quickly as possible.”

“It's clearly the situation where we have way too many people, we have way too many members of management, we have too many layers of management and too narrow spans of control,” Dunham said.

A Chesapeake spokesman Thursday confirmed that there have been some layoffs, but details were not provided.

In an internal email, Lawler said Tuesday that “future staffing adjustments will likely be necessary to properly align resources and improve our overall operating and competitive performance.”

He said the company is conducting an internal review, which is expected to be complete by Nov. 1.

More layoffs expected

Chesapeake executives have not indicated how many people are likely to lose their jobs.

The company confirmed Thursday that some laid-off employees have received Worker Adjustment and Retraining Notification Act (WARN) notices.

The notices are required when a company eliminates either one-third of its employee base in a community or at least 500 people. Chesapeake had more than 4,700 employees in Oklahoma City as of Jan. 31, according to a report it provided to the city in March.

Chesapeake has not yet filed a WARN notice with the Oklahoma Department of Commerce, indicating it has not yet reached the trigger amount.

Don Hackler, an attorney at the state Commerce Department, said he is not familiar with Chesapeake's situation, but that companies sometimes issue WARN notices to employees if they think the total number of layoffs in a 90-day period could reach the required amount.

“If they have phased layoffs and if the phased layoffs total 500, that would trigger the act,” Hackler said.

Chesapeake executives tightened their focus on reducing costs and increasing profits last year after a shareholder revolt forced the company to replace most of its directors. Dunham took over the company's board in June 2012.

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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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