ExxonMobil plans to lay off an unspecified number of employees as low oil prices force the company to delay major projects, Chief Executive Officer Darren Woods said in an email to staff.
As Bloomberg reports, Woods also mounted an extensive defense of fossil fuels, calling them a “higher purpose” that aids global prosperity at a time when European peers are looking at renewables as the future.
“These are difficult times,” Woods said in the message, the text of which was released by the company Wednesday. “We are making tough decisions, some of which will result in friends and colleagues leaving the company.”
The oil behemoth’s job cuts are just the latest sign of struggle among U.S. energy producers navigating the industry’s worst downturn in recent memory. This week, two high-profile mergers were announced as explorers seek to gain scale and cut costs to survive the devastating impact of COVID-19 on global demand for fuel. Many have succumbed to bankruptcy.
ExxonMobil’s stock has plunged 52% this year and the company all but ended its aggressive, $30 billion-a-year counter-cyclical growth strategy. The company was forced to slash its capital spending budget by one-third, or $10 billion, after crude dropped to the lowest in a generation. Rivals such as BP Plc and Chevron Corp. have also announced large layoffs in recent weeks.
“Our plan is to continue to stage project execution and spending,” Woods said. “Making the organization more efficient and more nimble will reduce the number of required positions and, unfortunately, reduce the number of people we need.”
But Woods was clear that the cutbacks are not a sign that his faith in oil and gas is in any way diminished. Fossil fuels will still account for half of the global energy mix in 2040 and often provide the most cost-effective pathway to development in poor countries, especially those in Africa and Asia, Woods said. Read the full story.