ExxonMobil will cut up to 1,600 jobs in Europe as the oil major continues to struggle with the destruction to demand caused by the coronavirus pandemic. The biggest US oil company by market capitalization on Monday said the virus had “increased the urgency” of reducing its costs and said the job losses would be made by the end of next year. The job cuts amount to more than a 10th of the company’s European workforce. Exxon employed about 75,000 people worldwide at the end of last year.
Exxon has been hit hard by the pandemic. The company was last week surpassed in value by US clean power producer NextEra Energy, which followed its removal in August from the Dow Jones Industrial Average after almost a century. The group’s share price has fallen by more than half this year. “Significant actions are needed at this time to improve cost competitiveness and ensure the company manages through these unprecedented market conditions,” Exxon said.
The global oil industry has been struggling since the coronavirus sapped demand this year as lockdowns grounded aircraft and kept cars off the roads. That shock, along with a surge in Saudi Arabian supply, sent oil prices tumbling. West Texas Intermediate, the US benchmark, in April traded in negative territory for the first time.
While prices have bounced back, producers have cut costs significantly. Exxon said in July it had reduced capital and exploration spending by about $2bn compared with the first quarter, and that it had “identified significant potential for additional reductions”. The company joins a growing lists of oil producers and service groups to announce job cuts. BP said in June it would axe 10,000 jobs to help cope with the impact of the pandemic, while Royal Dutch Shell last week said it would cut up to 9,000 positions by the end of 2022. Schlumberger, the world’s biggest oilfield services company, is in the process of downsizing its workforce by a fifth.