Oklahoma City News, Entertainment & Occasional Humor • Established 2007

Chesapeake announces Voluntary Separation Program. Layoffs may be next.

Earlier this week, I received an email from a Mole claiming that Chesapeake Energy planned on laying-off 10% of its Oklahoma City staff this Friday. I wasn’t able to confirm that rumor, but apparently Chesapeake has sent an email to certain staff today at 9:00am announcing a Voluntary Separation Program. I know this because we’ve obtained a copy of that email. It was sent by Henry Hood, Senior Vice President.

Here it is:

As you know, the past year or so has been particularly tough on the natural gas industry. Although natural gas prices have recovered a bit, we believe the sustained low natural gas price environment we have seen will have an effect on the levels of activity in our industry and at Chesapeake for some time to come. That means we must continue to focus on initiatives designed to control expenses and maximize performance so that we are able to maintain our leadership role in this changing and competitive industry.

As a result, Chesapeake is offering a voluntary separation program to certain Oklahoma City Headquarters, Field Professional and Field employees in designated departments. You are receiving this email because based upon your age and your years of service with Chesapeake, you are eligible to participate in the program.

If you elect to participate in this voluntary program, you will receive the following generous benefits:

· Separation Payment: equivalent to 12 months base pay

· Cobra Supplement: lump sum payment (if participating in the Company benefits plan) to pay for 12 months of COBRA premiums

· Stock Acceleration Benefit: 100% vesting of all outstanding shares of restricted stock

· Deferred Compensation Plan Acceleration Benefit: 100% vesting of unvested matching contributions in the Company’s Deferred Compensation Plan (the “401(k) Make-Up Plan”), if applicable

· Seniority Bonus: For eligible employees with 10 or more years of full-time Chesapeake service. The plan includes a bonus equal to $5,000 per full year of Chesapeake service starting with year 10 (for example, a $5,000 bonus for the 10th full year of service; a $10,000 bonus for 11 full years of service; a $15,000 bonus for 12 full years of service, etc.)

Attached to this email is a detailed Q&A that should answer many of your questions regarding this voluntary separation program. Additionally, later today you will receive from Human Resources your individual packet that will contain the program documents, timing and resource information. If you have additional questions, please refer to the HR contact information located in the attached Q&A.

As you review and consider participating in this voluntary program, please remember Chesapeake values your dedication to our company over the years and appreciates your contributions to our past success and positioning for the future.

Well, that’s not good. Let’s hope that is the extent of the staff reductions. We’ll have more on this story as it develops.

Update: Here’s a PDF of the an Employee Q&A that was attached to the email.

email

Comments

  1. This sucks for OKC. We had to know this was coming at some point though. I just hope it wont turn out to be a “Penn Square Bank” type collapse.

    Will the Thunder be laying off Eric Maynor?

    • Yep, it sucks. Anyone who roots against CHK roots against OKC. The company does a tremendous amount of good – in all sorts of ways – for this city.

  2. I know it may suck but the Dakotas have job openings for these people if they want to stay in the energy business. Make more $$ by moving also.

  3. An open records request and a huge scoop in one week… People are going to start taking y’all serious if you aren’t careful.

  4. ^^^^ So real. I have been really freaked out by the idea of Chesapeake collapsing on itself, and leaving so many without jobs. And a ridiculous complex of office buildings.

    • I’ve always wondered if they installed plumbing in all the office walls. That place would make some really nice Section 8 housing with convenient access to Whole Foods and all those nice walking trails in Nichols Hills.

  5. To echo Hardcore Troubadour’s theme, I’m worried about this new trend toward actual journalism by my favorite obscure niche local blog. You’ll be papering the walls of the Lost Ogle parents’-basement-headquarters with AP Supplieds next. (That’s an inside joke that will be appreciated only by Tony Sellars and one or two other of your readers who were my co-workers in the the KEBC-FM newsroom in the 70s and 80s.)

  6. The terms they’re offering are, on the surface, very generous – or at least they would be to anyone younger than the employees to whom they’re actually offering the package. If you’re 55 or 57 or 60 years old, good damn luck getting another job. That one year of salary and one year of insurance and $10K or $15K of bonus payment will go scary-fast as you go months-on-end without landing another job because you’re “too experienced.”
    Would be a great deal for a 63-65-year old, but how many of those are there in this group?

    • Are “older” employees the target audience? If so, that seems like it could open them up for a discrimination charge?

      • Early retirement programs are actually quite common. They do target older workers and are completely legal — since they’re not forcing the targeted employees to actually leave.

    • It is not uncommon for companies to make this sort of offer. My father took an early buyout from a national insurance company several years ago when he was a couple of years short of full retirement age and he felt he hit the lottery. A nice severance package is a lot better than getting nothing but an opportunity to file for unemployment.

  7. And a big Merry Christmas from Chesapeake! It seems that corporate assholes are the same at every company. All of their hearts are three sizes too small.

  8. However, if you’re an employee at CHK and get that e-mail, don’t you jump? I know a lot of people happy with their jobs that would love a year of benefits and salary.

    • Contrary to popular belief, the majority of workers at CHK don’t make as much as you think. They just have awesome fringe benefits. However, those are slowly going away as well.

  9. Haha the assholes of the energy industry keep proving why no one likes them and why everyone is glad to see them going down. Sorry to those employees losing their jobs but you should have seen this coming

    • It’s voluntary, and I suspect there’s more than a few there that are wishing they had gotten that email. Not a bad deal for those close to retirement, they should have many accept the offer.

  10. It’s not a bad idea. Yes, it sucks for those being ushered into retirement, but a mini golden parachute softens the blow. If the company needs to replace them later, a 25 year old will do it for half the salary.

  11. We find it’s always better to fire people on a Friday. Studies have statistically shown that there’s less chance of an incident if you do it at the end of the week.

  12. That seems like a smoking early buyout deal for those that are eligible.
    Soon, their complex will be a retirement village for former CHK employees who jumped ship. I can’t wait to see that!

    • Mr. Sofa, before you get yourself in a giddy frenzy over the thought of an empty complex, I’d ask you to remember that about 5000 families (mine included) depend on that paycheck coming out of CHK. Not to mention, the company donates about $35 million a year to area nonprofits.

      While you may despise the founder for whatever reason, he employs real people, with real kids and real responsibilities.

      • I don’t want anyone to lose what they have. That’s not my point. The point was that CHK got too big, too soon, and everyone but Aubrey raised an eyebrow and knew there were dirty dealings going on behind the scenes.
        I work with and know more than 20 former CHK employees who were escorted out of the complex a few years ago. All had been there over 10 years but came in one day only to be escorted to HR for out-processing.
        It stinks.
        But in the end…if CHK crumbles, there’s plenty of living space off 63rd and Western

  13. I just decided to leave Chesapeake a few weeks ago. They have been making life EXTREMELY difficult for their employees, and I couldn’t take it anymore. I (among other employees) have been very suspicious that they were trying to make work difficult for employees to “encourage” people to leave voluntarily before they do layoffs.
    It’s a shame. When I first started working at Chesapeake, I absolutely loved it. It was a great company to work for and I had zero complaints. Everything about the company now seems to be pretty shady. A lot has changed for the worst over the last year, and it’s really sad.

  14. I find it funny they are blaming natural gas prices with no mention of the idiotic manner in which their business model is based.

  15. They should look into going to work for Continental Resources, Inc. Continental can’t find enough people to hire, and is expected to triple oil production over the next 3 years.

    • No they are not. They are selling the Barnett Shale and laying off young people now. Unfortunately they are the next to fall. Too much debt. :( Say it ain’t so…

      • Well Shit. Big mistake! Delete!!! Continental is the best followed by Devon. I was thinking SandRidge. So Sorry.

        • SandRidge isn’t selling Barnett assets. They are selling assets in the Permian Basin and only a portion of their assets in this area. I don’t know of anyone that SandRidge has laid off for any reason other than that individuals lack of positive performance. Do they have tons of debt? Yes. Is that a huge negative? Yes. Hopefully they get their debt under control along with CHK and OKC can continue to thrive.

  16. I am a former Chesapeake employee. The truth is, CHK has been laying off people all year. Just not in numbers at any given time to require SEC reporting which the press would then become aware. I was laid off in September. I sure wish they offered me this sweet deal. They laid me off for cheap. CHK is another example that the employees pay the price for the incompetence of executives.

  17. I’m in the royalty management business and all my contacts at XTO in Ft. Worth say they can’t find enough people. Just sayn.

  18. Does everyone fail to notice that this program is voluntary? No one has to take it, but for those who have been on the fence about retirement, this is a sweet deal. For those who didn’t plan well for retirement or are too young to consider it, it’s a sad day to have this carrot dangled, but for those who are good and ready, I bet you see a good number of folks out celebrating tonight.

    • I don’t think anyone is failing to notice. However, if/when too few take the carrot, they will be the first to be laid off. I’m sure they’ll have very ‘legit’ reasons, too. One way or another, their employee numbers will drop.

  19. Not happy about any of this. We had an amazing run. Way better than the eighties. Thought everyone learned from that. I was wrong. I hope that sh!t doesn’t hit the fan. I love what Natural Gas has done for OKC. Don’t agree w the politics but I’m happy to get on the bandwagon.

  20. Okay. Everyone stop freaking out. Natural gas isn’t going anywhere. Once we get our infrastructure, regulations and export terminals sorted out – the gas will be flowing where it needs to go and the price will rise. I’m not sure if Chesapeake will still be in the game when it does (in 5 to 10 years?) since they don’t seem to be playing their cards very well. But, there are other energy companies out of Oklahoma who still have a fighting chance for a piece of the shale pie.

  21. This is not good news for the state or Oklahoma City. And there is something looming in the dark which may be much worse. Layoffs at the military bases, Tinker is the big one, and the federal structure in Oklahoma. The Tea Party will eat that up, but for every $1 spent by a Tinker employee, another $10 is generated in the local economy. So if Tinker takes a $100 million hit in payroll from the FISCAL CLIFF….do the math Oklahoma City. People are retiring from there in big numbers. I left in August.

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