ExxonMobil said today it is assessing worldwide job cuts after announcing voluntary layoffs in Australia as the latest in a wave of cost-cutting measures.
ExxonMobil initially said it had no plans for layoffs due to the coronavirus pandemic, but on its 31 July earnings call, Neil Chapman, senior vice president, said that given reduced activity, the company was evaluating its workforce requirements and looking at reductions “business by business and country by country.”
“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,” said spokesperson Casey Norton.
Australia is reportedly the first country outside the US where ExxonMobil has completed a review of its businesses. In announcing that it had completed a review of its current and future project work in Australia and was seeking volunteers to quit the company, it said, “This program will ensure the company manages through these unprecedented market conditions.”
The company did not say what percentage of its workforce it would cut but did say that in Australia it will consider all employees who expressed an interest in voluntary redundancy. The layoffs come as Exxon attempts to sell its 50% stake in the Bass Strait oil-and-gas joint venture, which analysts have estimated could yield up to $3 billion. Analysts have speculated it could also sell or close its Altona plant in Melbourne, Australia’s oldest refinery.
It is reported that ExxonMobil’s job cuts will continue globally into 2021. “Until other study work is complete, it would be premature to draw conclusions for other countries,” Norton said.
ExxonMobil said today it is assessing worldwide job cuts after announcing voluntary layoffs in Australia as the latest in a wave of cost-cutting measures.
ExxonMobil initially said it had no plans for layoffs due to the coronavirus pandemic, but on its 31 July earnings call, Neil Chapman, senior vice president, said that given reduced activity, the company was evaluating its workforce requirements and looking at reductions “business by business and country by country.”
“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,” said spokesperson Casey Norton.
Australia is reportedly the first country outside the US where ExxonMobil has completed a review of its businesses. In announcing that it had completed a review of its current and future project work in Australia and was seeking volunteers to quit the company, it said, “This program will ensure the company manages through these unprecedented market conditions.”
The company did not say what percentage of its workforce it would cut but did say that in Australia it will consider all employees who expressed an interest in voluntary redundancy. The layoffs come as Exxon attempts to sell its 50% stake in the Bass Strait oil-and-gas joint venture, which analysts have estimated could yield up to $3 billion. Analysts have speculated it could also sell or close its Altona plant in Melbourne, Australia’s oldest refinery.
It is reported that ExxonMobil’s job cuts will continue globally into 2021. “Until other study work is complete, it would be premature to draw conclusions for other countries,” Norton said.
In the US, professional employees who ranked in the bottom category of recent evaluations were given 30 days to decide if they want to try to meet their manager’s goals or leave the company. The evaluation system was modified late last year so more workers might land in that bottom category, with 8% to 10% of employees going through the process, up from 3% in 2019. Those employees can choose to leave with 90 days’ pay or are given 90 days to improve. The 30-day decision window is closing for many workers, so some are starting to leave Exxon, according to a report from Reuters.
Big Changes
Prior to the pandemic, ExxonMobil Chief Executive Darren Woods pursued an ambitious spending plan to boost oil output and turn around sagging profits on a bet that a growing global middle class would demand more of its products. Instead, the company has slashed capital spending by 30% this year and warned of deeper cuts in 2021, as it tries to defend a dividend paying nearly 9%.
ExxonMobil in July delivered the first back-to-back quarterly losses in at least 36 years. On 1 June, ExxonMobil and Chevron announced they were tightening output, for combined global shut-ins of 800,000 B/D, in response to plunging crude prices and shrinking fuel demand
On 6 August, the company said it may reduce its reserves by 4.5 billion BOE, a volume amounting to approximately 20% of its 22.4 billion BOE reported at the end of 2019.
Finally, on 31 August, ExxonMobil was removed from the S&P Dow Jones Indices after losing 32.6% of its value over the past year. The removal after 92 years of the longest-serving company in the Dow Jones Industrial Average left Chevron the sole energy stock on the Dow Jones index of 30 stocks closely watched by investors and economists. Its replacement by tech company Salesforce was viewed as a sign of energy’s falling influence on Wall Street.