After the oil price plummeted, major international oil companies could no longer stand it and began to promote layoff plans.
On May 27, Chevron, the second largest oil company in the United States, said it expected to cut 10% to 15% of its global workforce this year as part of a restructuring plan to deal with low oil prices. This is also the largest layoff among oil giants since the outbreak of the global epidemic in 2020.
“This was a difficult decision,” Chevron spokesperson Veronica Flores-Paniagua confirmed the news of the layoffs.
Currently, Chevron has about 45,000 employees, which means that the company’s number of layoffs in this round will reach 4,500-6,750.
Flores-Paniagua admitted that the expected layoffs are “in response to current market conditions” and will have a different impact on each business unit and region, and that most of the reductions will occur this year.
With oil demand set to slowly rebound in the coming quarters, major oil companies, as well as service providers and smaller drillers, are being forced to change their approach and cut costs to stay in business.
While oil prices have rebounded in the past few weeks, WTI is still down nearly 50% for the year, making it unaffordable for most major oil companies and smaller shale drillers.
The company added that it was unclear how the layoffs would affect each region and business unit.
Chevron, widely seen as a benchmark for financial discipline in the oil industry, was one of the first companies to slash budgets as oil demand plummeted.
According to the latest list of Fortune 500 companies in the United States, Chevron ranks 15th, second only to Exxon Mobil (ranking Third) oil companies.
Since the beginning of this year, the price of U.S. crude oil has fallen by nearly half to about $33 per barrel. Many companies are already in cost-cutting mode and are now under greater financial pressure.
In the first quarter of 2020, all oil companies were hit by the collapse in oil prices.
According to Anadolu Agency estimates based on the performance of the world’s 12 largest listed oil companies, these companies recorded net losses totaling US$20.6 billion in the first quarter of this year, while net income totaled US$20.6 billion in the first quarter of 2019. $23.4 billion.
Anadolu Agency analyzes Exxon Mobil, Chevron, ConocoPhillips, Halliburton, Schlumberger, Baker Hughes, Shell, BP, Total, Eni, Equinor and Rosneft The financials found that the oil majors’ total revenue fell 17% from the same period last year.
Among other major oil companies, BP will make further budget cuts in June, while Royal Dutch Shell will offer voluntary redundancies. ExxonMobil CEO Darren Woods said on May 27 that the company plans to cut operating costs by 15%, but layoffs are not part of the plan.
Rystad Energy said in an analysis report at the end of April that due to the coronavirus pandemic and its impact on global oil demand and prices, global oil and gas exploration and production (E&P) The company’s total annual revenue will plummet by $1 trillion this year.
According to Bloomberg, approximately 90,000 oil and gas jobs have been lost in the United States since March, accounting for 16% of the total.
Many companies in the energy industry have significantly cut expenses and salary levels, but the number of unemployed people is still rising. The wave of bankruptcies and layoffs of oil companies is coming fiercely and will continue in the future. </p
