Exxon to Lay Off 1,900 U.S. Employees as Pandemic Wreaks Havoc on Oil Demand

By Christopher M. Matthews 

Exxon Mobil Corp. said Thursday that it would lay off 1,900 employees in the U.S., becoming the latest major oil company to reduce its workforce as the coronavirus pandemic continues to batter the industry.

The struggling oil giant said most of the cuts would come from its management offices in Houston and that it expects the reductions will be both voluntary and involuntary. Exxon has said it is conducting a global review of its 74,000 employees and previously announced 1,600 layoffs in Europe and voluntary layoffs in Australia.

Exxon made the announcement a day before it is set to report quarterly earnings. Analysts expect the company to post its third consecutive quarterly loss for the first time on record.

Despite a modest economic recovery, oil-and-gas companies are being hammered by a sustained drop in consumption of gasoline and jet fuel as millions of people work from home and avoid driving and flying during the pandemic.

New lockdowns in Europe in response to climbing Covid-19 cases are dampening hopes that the global economy will regain its footing this year. That is combining with longer-term concerns about future competition from renewable energy and electric vehicles to drag down the value of many oil-and-gas companies to decade lows.

The oil-and-gas industry has shed tens of thousands of jobs and many of Exxon's peers have already announced significant layoffs.

Royal Dutch Shell PLC said in September it would cut up to 9,000 jobs in a broad restructuring and BP PLC plans to cut nearly 10,000 jobs, or 14% of its workforce, and freeze pay increases for senior level managers. U.S. rival Chevron Corp. has said it would reduce its 44,679 workforce by as much as 15%.

Exxon's shares have fallen more than 50% this year and the company has had to borrow billions of dollars to pay its costly dividend. Shell and BP cut their dividends earlier this year to shore up their finances. Exxon and Chevron said this week they would maintain their current dividend payments.

Write to Christopher M. Matthews at [e-mail]

(END) Dow Jones Newswires

October 29, 2020 12:01 ET (16:01 GMT)

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