Exxon announces additional job cuts amid ongoing Covid-19 hit to oil demand

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A view of the Exxon Mobil refinery in Baytown, Texas.
Jessica Rinaldi | Reuters

Exxon said Thursday that it intends to reduce its U.S. staff by around 1,900 employees as the energy giant continues to see its operations pressured by the coronavirus pandemic. The layoffs will occur through a mix of voluntary and involuntary programs.

Exxon said the reduction is part of ongoing reorganization efforts aimed at improving efficiency and reducing costs.

“These actions will improve the company’s long-term cost competitiveness and ensure the company manages through the current unprecedented market conditions,” a statement from the company said. “The impact of COVID-19 on the demand for ExxonMobil’s products has increased the urgency of the ongoing efficiency work.”

Earlier in October Exxon said it was cutting its European operations by 1,600 positions through the end of 2021. According to Edward Jones’ Jennifer Rowland, the combined cuts represent about 5% of Exxon’s global workforce.

The announcement comes as the oil and gas industry continues to feel the pain of the coronavirus pandemic. West Texas Intermediate, the U.S. oil benchmark, has recovered since plunging into negative territory for the time time on record in April, but the contract still trades at a deep discount to prior prices.

On Thursday WTI traded around $36. As recently as January it traded north of $62 per barrel.

Amid the decline in prices, energy companies have taken drastic measures to improve their balance sheets, including reducing staff and in some cases suspending dividends.

Exxon has repeatedly said that its dividend remains a priority. On Wednesday the company maintained its fourth quarter dividend at 87 cents per share, although this was the first time since 1982 that it didn’t raise its payout.

Exxon will report third quarter results on Friday before the market opens. Shares were up 2.6% during midday trading. For the year, the stock is down 53%.

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