A view of the Exxon Mobil Refinery in Baytown, Texas.
Jessica Rinaldi | Reuters
Exxon announced Thursday that it intends to cut its U.S. workforce by around 1,900, with global headcount downsizing potentially up to 15% as the energy giant remains under pressure from the coronavirus pandemic.
The layoffs in the US will be through a mix of voluntary and involuntary programs. Exxon said the reduction is part of ongoing restructuring efforts to improve efficiency and reduce costs.
"These measures will improve the long-term competitiveness of the company's costs and ensure that the company can cope with the current unprecedented market conditions," the company said in a statement. "The impact of COVID-19 on demand for ExxonMobil products has increased the urgency of ongoing efficiency work."
In early October, Exxon announced that it would reduce its European operations by 1,600 jobs by the end of 2021.
An Exxon spokesman said the company was conducting country-specific reviews, which could result in a 15% decrease in the global workforce. The company expects 14,000 contractors and employees to be affected by the programs already announced. At the end of 2019, Exxon had 88,300 employees worldwide, including 13,300 contractors.
The announcement comes as the oil and gas industry continues to feel the pain of the coronavirus pandemic. West Texas Intermediate, the US oil benchmark, has rebounded since falling into negative territory for the recorded time in April, but the contract is still trading at a sharp discount to previous prices.
On Thursday, WTI was trading around $ 36. As recently as January, trading was north of USD 62 a barrel.
With prices falling, energy companies have taken drastic measures to improve their balance sheets, including downsizing and, in some cases, suspending dividends.
Exxon has repeatedly stated that its dividend remains a priority. On Wednesday, the company kept its dividend for the fourth quarter at 87 cents per share, though this was the first time since 1982 that it hasn't increased its payout.
Exxon will publish its third quarter results on the Friday before the market opens. During afternoon trading, stocks rose 4%. For the year, the stock is down 53%.
Correction: Exxon has 88,300 regular employees and contractors worldwide. An earlier version incorrectly characterized the character.