Associated Press
Chesapeake says it has cut 50 jobs in OKC office
By MURRAY EVANS , 06.22.09, 06:32 PM EDT
OKLAHOMA CIY --
Chesapeake Energy Corp. acknowledged on Monday that it has laid off employees at its corporate office.
The independent natural gas producer said in a statement Monday that it "eliminated less than 50 positions of over 3,300" at its Oklahoma City headquarters. The statement did not indicate if the company cut jobs at other locations or what kind of jobs were lost.
Rumors of the layoffs had swirled late last week, although Chesapeake declined to acknowledge the job cuts until issuing the statement late Monday afternoon.
The company said the jobs were cut "to correspond with the level of existing exploration and activity." Chesapeake has dropped its operated rig count from 158 in August to 95 now because of lower natural gas prices.
Chesapeake said it has more than 8,300 employees in the U.S.
In a statement issued Friday after word about the layoffs began surfacing, Chesapeake initially cited company policy in not disclosing what it called "independent employment decisions that we make in the course of our operations."
The Friday statement also said that "since July 2008 we have added 900 net employees and since January of this year, we have added 350 net employees. In Oklahoma City, we have added 350 net employees in the past year and 150 net employees in the past six months. We currently have more than 70 job openings across the country."
The layoffs come as Chesapeake faces lawsuits filed by four separate shareholder groups, claiming that the company's board failed in its fiduciary duties when it awarded CEO Aubrey McClendon a $75 million bonus on Dec. 31.
The bonus raised McClendon's pay package for 2008 to $112.5 million, which an Associated Press calculation determined to be the highest for a CEO among Standard & Poor's 500 companies. It also was more than four times higher than his $25.5 million pay package in 2007.
McClendon, one of Chesapeake's co-founders and one of nine members of the company's board of directors, was awarded the bonus even after a tumultuous financial year. Chesapeake's stock fell to $9.84 in December, its lowest since August 2003, after reaching as high as $74 over the summer.
It closed Monday at $19.36, down $1.59.
Last October, McClendon was forced to sell 31.5 million shares - about 94 percent of his stake in the company - to meet margin loan calls. He said earlier this month after a shareholders' meeting that he has not repurchased any company stock.
After a shareholder lectured McClendon during the meeting, McClendon forcefully defended himself and his abilities to lead Chesapeake
"I'll tell you there's not a harder working guy out there who thinks every day about how to create shareholder value," McClendon said. "And, I'm dedicated to that. I've been dedicated to it for 20 years. And as long as this board is willing to employ me, that's what I'll be dedicated to for the next 20 years."