U.S. oil giant ExxonMobil (NYSE:XOM) is planning to cut 1,900 jobs, or about 2.6% of its workforce, according to an Oct. 29 press release. The news comes about three weeks after the company announced an estimated 1,600 job cuts in Europe.
In March, the Saudi Arabia-Russia oil price war caused global oil prices to crash. Then the rapidly spreading COVID-19 pandemic destroyed demand for oil, resulting in ExxonMobil making a commitment to major spending cuts. These workforce reductions are the latest part of that cost-reduction plan.
The writing on the wall
Employees of the largest U.S. oil and gas specialist had been bracing for such an announcement after receiving an Oct. 21 email from CEO Darren Woods regarding the state of the company.
At first, Woods discussed ExxonMobil's cost-cutting efforts so far in 2020. According to Woods, these have included "deferring more than $10 billion in capital and cutting 15% of cash operating expenses."
However, the CEO went on to say, "I wish I could say we were finished, but we are not. We still have some significant headwinds, more work to do and, unfortunately, further reductions are necessary."
"Making the organization more efficient and more nimble will reduce the number of required positions and, unfortunately, reduce the number of people we need," he concluded.
According to Thursday's press release, the reductions will come primarily from the company's Houston headquarters. "These actions will improve the company's long-term cost competitiveness and ensure the company manages through the current unprecedented market conditions," it said.
On Wednesday, ExxonMobil announced it would not raise its dividend this calendar year, for the first time in 18 years.