Exxon eyes global job cuts to keep afloat after oil price collapse

2 Sep, 2020

US oil major Exxon Mobil signaled it may downsize its staff worldwide after offering voluntary redundancies among its Australian workforce to mitigate the aftermath of the coronavirus crisis.

“We have evaluations underway on a country-by-country basis to assess possible additional efficiencies to right-size our business and make it stronger for the future,” spokesman Casey Norton said in emailed comments to Reuters.

The statement comes shortly after the energy major announced that it was looking for volunteers among its employees in Melbourne, Gippsland, Sydney, Adelaide and Perth, to quit. The voluntary layoffs program is set to ensure the “company manages through these unprecedented market conditions,” ExxonMobil said on its Australian website.

It is unclear how many employees Exxon wants to let go. The company had 75,000 workers at the end of last year. According to the company’s spokesman, it is still too early “to draw conclusions for other countries.”

Exxon has previously denied reports that it was planning massive layoffs as some claimed that the company tries to quietly fire its employees using its altered internal employee-ranking system.

According to leaked documents and former employees’ accounts cited by Business Insider, the company expanded the number of employees that were required to fall under lowest rank, putting at least eight percent of its US staff at risk of losing their job. However, the company insisted that the move did not intend to reduce headcount.

The coronavirus pandemic crippled demand for fuel, sending already volatile oil prices into a tailspin. Hit hard by energy market turmoil, energy companies started to slash capital spending and dividends, but Exxon tried to avoid further spooking its investors by maintaining the eight percent dividend yield after its stock crashed this year.

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Exxon may follow suit of its rivals BP and Chevron and smaller companies which announced job cuts to reduce costs to weather the impact of the pandemic. In June, BP announced plans for 10,000 layoffs or around 15 percent of its workforce, while Chevron was planning to cut some 6,000 workers.