Exxon is cutting 1,900 US jobs as oil prices crumble again
ExxonMobil is cutting jobs at home and overseas as oil prices tumble on coronavirus fears.
Exxon announced Thursday that it will cut about 1,900 jobs in the United States, mostly at its headquarters in Houston, through layoffs and voluntary programs. The company said the cost cutting is the result of a years-long reorganization that has been accelerated by the pandemic.
All told, Exxon (XOM) plans to shrink its global workforce of contractors and employees by more than 14,000 by the end of 2022. That would amount to a 15% reduction from Exxon’s 2019 total workforce of more than 88,000.
Chevron (CVX), meanwhile, announced it will cut about a quarter of the jobs at Noble Energy, the oil-and-gas company it recently acquired for $13 billion. That amounts to the loss of about 600 positions.
The layoff announcements come as oil prices drop sharply on renewed worries about the intensifying pandemic. US crude plunged below $35 a barrel Thursday, marking a new four-month low.
“These actions will improve the company’s long-term cost competitiveness and ensure the company manages through the current unprecedented market conditions,” Exxon said in a statement.
Cheap oil is crushing Exxon’s share price, which has been cut in half this year. Once the world’s largest public company, Exxon has been surpassed by Zoom (ZM) in market value. Today, Exxon is worth about $136 billion, compared with $140 billion for Zoom, the upstart video platform. Exxon has lost a stunning $310 billion in market value since peaking at $446 billion in mid-2014.
In another symbol of the company’s startling decline, Exxon was removed from the Dow Jones Industrial Average in August, where it had been a member for almost a century.
Besides weak oil prices, Exxon and other fossil fuel companies are being shunned by investors increasingly concerned about the climate crisis. The ESG movement has driven a surge of money into clean energy and away from companies viewed as part of the problem. Earlier this month, Exxon was briefly dethroned by solar and wind company NextEra Energy (NEE) as America’s most valuable energy company.
Exxon’s business is hurting so much that the company is struggling to pay its coveted dividend, which Exxon has successfully raised for 37 consecutive years.
Exxon previously announced about 1,600 job cuts in Europe as well as a voluntary program in Australia.
“ExxonMobil’s announcement about thousands of job cuts is another log on the bonfire that’s been oil and gas employment in 2020,” Jeff Bush, president of oil-and-gas recruiting firm CSI Recruiting, told CNN Business.
Exxon said employees who get laid off will receive support, including severance and outplacement services.
“The company recognizes these decisions will impact employees and their families, and has put these programs in place only after comprehensive evaluation and thoughtful deliberation,” Exxon said.