The Leaner, Meaner Chevron Is Ready to Fight

CEO Mike Wirth is overhauling the oil giant's 'nice' corporate culture, getting tougher employees, rivals and politicians

- Collin Eaton

Chief Executive Mike Wirth had a stern message for Chevron's 40,000 employees in February: Stop being so nice to each other. Leaders need to be more decisive, take accountability for failures and have uncomfortable conversations about poor performance, Wirth and his lieutenants said during a virtual companywide meeting. A change in attitude could keep Chevron from falling behind its competitors, they said, according to people who attended the meeting.

The effort to overhaul Chevron's corporate culture emanated from a report the company commissioned from consulting firm McKinsey that found employees were frustrated. The company wasn't innovative, and it lacked a clear strategy, they said.

"We are 'nice' even when desired results or behaviors are not achieved," according to McKinsey's summary of employee feedback, which was reviewed by The Wall Street Journal. "We emphasize collaboration and inclusion to build strong teams...but we do not have direct, uncomfortable conversations needed to deliver results."

Chevron executives turned to McKinsey last year as its shares lagged behind rival Exxon Mobil's amid headwinds in key parts of its oil business. Its major oil project in Kazakhstan had hit costly snags. As oil prices moderated, drilling slowed in the Permian Basin, the largest U.S. oil field. And, most notably, its $53 billion acquisition of Hess was stalled after a shocking move by Exxon to try to intervene in the deal.

Now, the $310 billion oil giant, the second largest in the U.S. behind Exxon, is getting tougher not just on its employees but also on rivals, political detractors and anyone else it encounters.

After outlining a sweeping reorganization of its business units on the February call, Chevron announced plans to cut roughly 8,000 jobs, or up to 20% of its workforce, through 2026, part of a plan to save up to $3 billion. And two weeks ago, the Hess deal finally closed.