Exxon Mobil Corp. will slash its global workforce by 15% over the next two years, an unprecedented culling by North America’s biggest oil explorer as it struggles to preserve dividends.
The cuts will include 1,900 U.S. jobs, mostly in Houston, as well as an undisclosed number of positions around the world.
“These actions will improve the company’s long-term cost competitiveness and ensure the company manages through the current unprecedented market conditions,” the company said in a statement on Thursday.
Exxon’s total reduction will affect about 14,000 people, split between employees and contractors, spokesman Casey Norton said by phone. The figure includes the U.S. job cuts, as well as layoffs and retirements previously announced in Europe and Australia, and future reductions in Canada and elsewhere.
Earlier this month, the company revealed plans to reduce its UK headcount by 400 by the end of 2021.
Exxon has a footprint in Aberdeen, Fawley, Fife, Leatherhead and Newport.
It’s understood the firm is look for buyers for its UK North Sea business.
Exxon’s Big Oil rivals are also cutting thousands of jobs in response to the pandemic-induced demand slump. BP Plc plans to slash 10,000 jobs, Royal Dutch Shell Plc will cut as many as 9,000 roles and Chevron Corp. has announced around 6,000 reductions.
Exxon’s in-house workforce stood at 74,900 people, as of Dec. 31, according to data compiled by Bloomberg. However, the fact that it’s cutting at all is a sign of its weakened financial position compared to its former status as the S&P 500 Index’s biggest company less than a decade ago and a profit powerhouse used to riding out oil-price cycles.
This year’s downturn has been particularly painful because it affected refining, usually a cushion in times of low oil prices, and because it came at a time when Exxon was already increasing borrowing to fund a large expansion program. The company was forced to retreat on these plans in April, reducing capital spending by $10 billion and delaying or scaling back most of major projects.
The stock has plunged 54% this year. Its dividend yield is now more than 10%, indicating that investors are anticipating a cut. Exxon maintained the quarterly payout on Wednesday, and is expected to post its third consecutive quarterly loss when it reports earnings tomorrow.