In July, Exxon told Reuters it was not considering layoffs amid the virus pandemic collapsing global energy demand, which resulted in crude prices spiraling lower to unprofitable levels. Now, with Brent crude contracts trading around $45.90 per barrel on Wednesday morning, a company spokesperson told Reuters it's currently evaluating a new program to ax worldwide jobs.
"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," company spokesperson Casey Norton said in an emailed statement to Reuters.
The shift to slash its workforce and reduce its corporate footprint comes as other oil majors (see: here) have also embarked on cost-cutting sprees this summer as fuel demand remains depressed.
Norton didn't provide details on percentage targets to reduce its worldwide workforce through year-end or in 2021. Though Exxon said Wednesday, it had started a voluntary redundancy program for its operating segment in Australia.
"This program will ensure the company manages through these unprecedented market conditions," it said in a statement.
Reuters notes there were no specifics given in downsizing or restructuring situations of Exxon's Australian segment.
"Until other study work is complete, it would be premature to draw conclusions for other countries," Norton said.
The voluntary redundancy program is being offered to all employees in Melbourne, Gippsland, Sydney, Adelaide and Perth, the statement said.
Exxon is expected to sell a 50% stake in the Bass Strait oil and gas joint venture in southeastern Australia, which Reuters estimates could fetch upwards of $3 billion.
The news of Exxon reducing its workforce and shrinking operations comes after US oil and gas companies are considering or have already begun to cut jobs and shrink operations (see: here & here) amid continued negative market impacts thanks to the virus pandemic, a move to preserve what is left of shareholder value.
Exxon shares were halved during the virus pandemic. Shares remain -44% from January's high of $71.34.
Exxon's 8.7% dividend yield stinks of desperation.
As for the possibility more pain could be headed to the oil and gas industry, read our latest piece tilted "The Real Reason The Oil Rally Has Fizzled Out."