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The oil industry appears to have suffered hugely since the outbreak of the coronavirus. Over 100,000 workers in the oil, gas, and chemical industries are said to have been laid off according to a recent study by Deloitte Insights.

The latest however is US oil giant Exxon Mobil which is laying off some 1,900 workers at its Houston office as the pandemic continues to sap demand for fuel. The Texas oil giant which had over 75,000 employees globally at the end of 2019 will consider both voluntary and involuntary layoffs

Prior to the pandemic, the oil industry was facing challenges of a weakened global economy resulting in a reduction in demand for energy and producers flooding the market with cheap fuel.

On Thursday, a barrel of US benchmark crude was selling for about $35, far less than the $50 price required by producers to break even. Exxon’s’ announcement comes at a time the coronavirus pandemic has gripped the US economy, reducing the demand for fuel.

CEO OF Exxon Darren Woods said in a recent email to workers that the impact of the pandemic is severe as consumption tightened when economies shut down. “It’s difficult to overstate the devastating impact of the pandemic on businesses big and small, in every community and country around the world,”. Said, Darren Woods

In a meeting with employees last week, Woods said the company is exceeding the spending reductions it announced in March, deferring more than $10 billion in capital expenses and cutting 15% of cash operating expenses. The company recently announced it would cut about 1,600 jobs in Europe and it began a voluntary staff reduction program in Australia. It is also evaluating potential job cuts in Canada. Exxon said Wednesday it would pay a cash dividend of 87 cents per share in the fourth quarter, keeping the payment level flat.

Chevron, another oil giant confirmed on Thursday it will cut jobs by 25 % at its newly acquired Noble Energy. The company, which has about 44,000 employees worldwide, is working to reduce its headcount by 10% to 15%. The California-based company reduced its 2020 capital spending plan by 20%, or about $4 billion, in March.

Source: click2houston.com