Adedapo Adesanya
By Adedapo Adesanya
Exxon Mobil Corporation has announced plans to further reduce its workforce in the coming weeks.
The leading integrated energy company is nearing the completion of its staff appraisal in the United States and Canada after which some workers will lose their jobs.
According to report, in an email to its employees, the company’s chairman and CEO, Mr Darren W. Woods, said that additional reduction of headcounts was necessary since the energy business scenario is still challenging.
Notably, the coronavirus pandemic has significantly battered global energy demand since strict lockdown measures are being taken to curb the spread of the virus. The drastic fall in fuel demand has dragged the price of Brent and West Texas Intermediate (WTI) crudes, which are currently around the $40 mark per barrel, down after hitting as high as $70 at the start of 2020.
Mr Woods added that the pandemic has slashed global demand for crude oil by 20 per cent. This has led the energy giant to consider additional job cuts although the company has surpassed its 2020 target of cutting operating expenses and capital spending by $1 billion and $10 billion, respectively.
“I wish I could say we were finished, but we are not. We still have some significant headwinds, more work to do and, unfortunately, further reductions are necessary,” he said in the email.
Mr Woods said the demand loss is five times the decline of the 2008 financial crisis, but assured that industry under-investment currently being faced will increase the need for the company’s products in the near future.
The company is the second-largest oil firm in the United States by market value and it has lost nearly $1.7 billion in the first six months and analysts forecast a third-quarter $1.17 billion loss for the year.
Unlike other giants, Exxon was slower than rivals to react to this year’s oil price decline and borrowed $23 billion to shore up a balance sheet strained by the losses and a nearly $15 billion annual dividend payment to shareholders.
