Exxon, Chevron to cut US jobs as oil industry struggles

NEW YORK (AP) — Exxon Mobil is slashing 1,900 jobs from its United States (US) workforce, and Chevron plans to cut a quarter of the employees at its recently-acquired Noble Energy as the pandemic saps demand for fuel.

Exxon said on Thursday the reductions will be both voluntary and involuntary and will largely come from its management offices in Houston. The Irving, Texas oil giant had about 75,000 employees worldwide at the end of 2019.

The oil industry was already struggling before the pandemic struck, with a weakened global economy decreasing demand for energy and producers flooding the market with cheap fuel.

Then prices fell well below what producers need to break even. A barrel of the US benchmark crude was selling for about USD35 on Thursday, and most producers need at least USD50 a barrel to make ends meet. As the pandemic gripped the US economy and demand for fuel plummeted, Exxon announced in March that it would cut expenses by 30 per cent.

“It’s difficult to overstate the devastating impact of the pandemic on businesses big and small, in every community and country around the world,” Exxon CEO Darren Woods said in a recent e-mail to employees. “The impact has been especially severe on our industry as energy consumption contracted when economies shut down.”

In a meeting with employees last week, Woods said the company is exceeding the spending reductions it announced in March, deferring more than USD10 billion in capital expenses and cutting 15 per cent of cash operating expenses.