Chevron (CVX) said Wednesday it will reduce 15% to 20% of its workforce as part of a cost-cutting plan.

The oil giant expects the layoffs to start this year, with most of the cuts projected to complete before the end of 2026, Vice Chairman Mark Nelson said in a statement e-mailed to MT Newswires.

"These reductions are in line with our previous announcement of $2 [billion] to $3 billion in targeted structural cost reductions by the end of 2026, with some residual impact in 2027 and beyond," Nelson said.

Chevron shares were down 1.4% in Wednesday late-afternoon trade. The stock has risen 7.2% so far this year.

Late last month, the company's fourth-quarter revenue and oil production topped expectations, but earnings missed Wall Street estimates as its downstream business posted a loss on an annual basis.

"Chevron is taking action to simplify our organizational structure, execute faster and more effectively, and position the company for stronger long-term competitiveness," Nelson said Wednesday. "This work includes optimizing the portfolio, leveraging technology to enhance productivity, and changing how and where work is performed, including the expanded use of global centers."

In October 2023, Chevron agreed to acquire oil-and-gas producer Hess (HES) in an all-stock deal worth $53 billion. However, that deal is reportedly tied up in an arbitration with rival Exxon Mobil (XOM).

Chevron expects to close the Hess transaction in the third quarter, Chevron Chief Executive Mike Wirth said on a Jan. 31 earnings conference call. "We continue to be very confident in Hess' position in the arbitration."