Chesapeake says goodbye to 800 employees

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On Oct. 15, Chesapeake Energy announced that 800 people had been fired from within the company.

According to Forbes, “of the 800 employees let go from Chesapeake,” whose headquarters is in Oklahoma City, “at least 640” are from the greater Oklahoma City area. The layoffs, part of a profit and efficiency-focused overhaul by CEO Doug Lawler, were the last stage of transformation.

“I wasn’t too surprised when I heard about the layoffs,” senior business major Bo Erwin said. “They obviously needed changes made in their finances and the quickest and easiest way to do that is through pay cuts.”

Faculty at Oklahoma Christian University agreed with what Erwin had to say.

“In business, sometimes you find yourself overloaded with debt of one sort or another,” Dean of the College of Professional Studies Phil Lewis said. “And in the case of Chesapeake specifically, they have way too many employees.”

Lewis explains that the previous CEO of Chesapeake was a strong believer in making the number of employees a status of company success, regardless of need for more workers.

“Devon Energy has perhaps one-fourth the employees at Chesapeake, yet makes much more money,” Lewis said.

While the company’s public relations department declined an interview, they provided a copy of the letter to Chesapeake employees from the CEO, in which Lawler states that he has worked with a team of more than 75 consultants to attain the “goal of becoming a top-performing E&P [Exploration and Production] company.”

“I didn’t leave to come here to not be successful with the company,” Lawler said in an interview with the Oklahoman. “Chesapeake isn’t about one person. It’s about a company of motivated employees.”

“[When] a new leader comes in, they’re going to make changes,” senior business major Hannah Fuller said. “It’s just business. The new CEO is just taking a new approach on the company’s strategic plan in hopes of bettering the company.”

In light of making such a difficult decision, Lawler expressed his appreciation to all Chesapeake staff, past and present.

“We are grateful for the contributions of each employee impacted by the work force reduction,” Lawler said in his letter to the company. “It was important to me that we took careful, diligent steps to evaluate our organization and to make sure each affected employee was treated with dignity and respect.”

While the pain of suddenly being without work cannot be totally alleviated, Chesapeake has assisted its former employees in transitioning as smoothly as possible from the company.

“We offered eligible employees a severance package which included three months’ pay, 100 percent acceleration of equity, a lump sum COBRA payment [temporary continuation of healthcare] and outplacement services,” Lawler’s letter said.

Despite the amount of layoffs of the workers, Chesapeake still employs 3,500 people in Oklahoma City and 11,000 across the country.

Perhaps the greatest topic of criticism against Lawler is his recent purchase of a nearly $4 million mansion in Oak Tree in north Edmond. Oklahoma City blog The Lost Ogle was not very complimentary of this latest acquisition.

“Yeah, Lawler inherited a mess from Aubrey McClendon, but it still seems tacky to go out and buy this mansion just months before you lay off a large percentage of your workforce,” the article jabbed at Lawler. “He knew the layoffs were coming. He should be living in a hotel or bought the home under a trust.”

Lewis thinks the issue is a bit thoughtless on Lawler’s part, considering any upset ex-employees with a grudge against the company and specifically the CEO.

“For the amount of money [Chesapeake is] paying him, I’m sure he can afford a $4 million dollar home,” Lewis said. “But if you were one of the people who just got fired, you would think that’s a little insensitive.”

Many people Lewis knows at Chesapeake think highly of Lawler.

“Most of the people I’ve visited with at Chesapeake, who still have a job, have a lot of respect for the new CEO,” Lewis said. “They think the other one was just in a spending binge that needed to be changed anyway.”

Others are more understanding, or at least indifferent to what Lawler does in his personal life.

“Lawler is just trying to change Chesapeake into a more profitable business,” Fuller said. “His spending habits in his personal life don’t really change my opinion about him. What Lawler does in his personal life … has no reflection on his strategy for Chesapeake.”

Erwin agrees with Fuller on the controversy surrounding the Lawler mansion.

“It’s his money,” Erwin said. “I don’t have a problem with it. I guess you could argue that he doesn’t need that much house or whatever, but it’s his money and he has the right to spend it how he pleases.”

To business students who may be worried about their future careers, Lewis assures them that this is a natural cycle of corporate America.

“You just have to do the very best job that you possibly can, and that will be noticed,” Lewis said. “One of the things about OC grads that everybody notices is their willingness to work and their sense of high priorities and ethics. This school has such a good reputation in the local business community that I don’t think there’s a lot to worry about.”