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- Exxon is slashing its global workforce by 15%, and up to 1,900 US workers could lose their jobs. Here's a detailed timeline and a look at which roles will be cut.
Exxon on Thursday said it would cut as many as 1,900 jobs in the US after a strategic review, according to a presentation seen by Business Insider.
By the end of 2022, the oil giant plans to reduce its global workforce 15%. That amounts to 14,000 contractor and employee roles.
The US cuts will be both voluntary and involuntary, and largely impact workers at Exxon's Houston campus and Hughes Landing office.
The cuts are part of a global review of the company's operations that's tied, in part, to an effort to shrink spending amid the oil price downturn.
The firm previously announced job cuts in Europe, and it began slashing its workforce this summer through performance-based cuts.
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Exxon Mobil, the nation's largest oil company, said on Thursday that it would cut up to 1,900 US workers as part of an effort to shrink spending, according to a presentation reviewed by Business Insider.
The cuts are part of an expected 15% reduction in the firm's global workforce — including both contractors and employees — by the end of 2022. The company's headcount stood at almost 75,000 at the end of 2019.
The oil giant lost $1.1 billion in the second quarter and analysts expect Exxon to report another loss on Friday when it announces results, per Bloomberg data.
The US cuts will mainly take place between January and April of 2021, and they will include both voluntary and involuntary separations, the presentation shows.
For months now, Exxon has been carrying out a country-by-country review of spending and workforce requirements. Based in Irving, Texas, the company already announced results from the reviews in Australia and Europe, which resulted in voluntary redundancies and job cuts, respectively.
As Business Insider previously reported, Exxon has completed the US review and Darren Woods, the company's CEO, met with the board Wednesday to discuss the results. The results were shared with staff in concurrent virtual meetings today.
Nearly all major oil companies including BP, Chevron, and Shell are cutting staff to shrink spending amid the oil price downturn. On Wednesday, the price of Brent crude, the international benchmark, tumbled as fears of the pandemic and its impact on oil demand escalated. It was down more than 40% from the start of the year on Thursday morning.
"As Darren Woods told employees last week, we have taken country-by-country review to determine the best steps for reducing costs," Casey Norton, an Exxon spokesperson, said. "The result is workforce reductions approaching 15 percent. There are more countries and affiliates undergoing their reviews now, and we will communicate those results when the work has concluded."
'Further reductions are necessary'
Exxon has been overhauling its global operations for years to become more competitive and cut costs. In a forum last week, Woods said the company would need to make more cuts.
"I wish I could say we were finished, but we are not," he said in an email to staff following the forum. "We still have some significant headwinds, more work to do and, unfortunately, further reductions are necessary."
Exxon previously said it would cut up to 1,600 jobs in Europe through 2021. Internal documents obtained by Business Insider show that about half of those positions are in the company's fuel and lubricants division.
A timeline for the cuts
Exxon is cutting US workers through both voluntary and involuntary programs, per the Thursday webinar. The company said the voluntary program would start first, and there is not a specific target for the breakdown between the two programs.
The voluntary program will apply to retirement eligible workers, according to the webinar. They'll find out the status of their application for the voluntary program by the end of November.
Meanwhile, employees who are laid off involuntarily will find out in early December and be taken off the payroll between February and April of next year.
Impacted roles
The US job cuts are expected to impact workers in the company's Texas offices in Houston and Hughes Landing.
According to a slide in one of the webinars, Exxon will determine who will be laid off "based on an assessment of critical skills, longterm fit with ExxonMobil's core values — both combined accounting for 70% — and current and prior performance which accounts for 30%."
The company also said that about 35% of HR positions would be impacted by the end of 2021 as part of the US review, as will 200 people in Exxon's fuel and lubricant's division.
Exxon has been cutting staff for months through its employee ranking system
Exxon previously avoided talk of job cuts. Woods told investors in May that the company had no plans for layoffs at that time.
Meanwhile, the company began shrinking its workforce by ramping up performance-based cuts this summer, as Business Insider previously reported.
The performance-based cuts could end up shrinking Exxon's US workforce by up to 10%.
Source: https://www.businessinsider.com/oil-giant-exxon-to-cut-workers-layoffs-after-strategic-review-2020-10
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