ConocoPhillips announces it will reduce its workforce by 20-25%. Shares fall
ConocoPhillips, an American oil and gas company, will reduce its workforce by 20-25% as part of a broader restructuring program. This was confirmed on Wednesday, after five sources said that CEO Ryan Lance had detailed his plans in a short video earlier today.
The largest independent oil producer saw its shares fall 3.9%, to about $95.11.
Lance stated in a video that the company would need fewer positions as it streamlines its organization. He also said that the rising costs had left the company lagging behind other companies.
He claimed that the controllable costs of production were $2 more per barrel than competitors. Costs rose from $11 per barrel in 2021 to $14 in 2024.
ConocoPhillips employs approximately 13,000 people worldwide, which means that between 2,600 to 3,250 workers will be affected. ConocoPhillips' spokesperson Dennis Nuss told me in an email that the majority of the cuts would be made by the end of this year.
Two sources stated that the new management and structure will be revealed in mid-September and the reorganization would be complete by 2026.
Sources said that the company will hold a town-hall meeting at 9 am Central Time on Thursday.
SLB, a service company and oil major Chevron both announced layoffs in the first half of this year.
Two sources reported in April that Houston-based ConocoPhillips hired Boston Consulting Group as a management consulting firm.
Restructuring advice
The internal term for the layoff program is "Competitive edge."
ConocoPhillips announced last month that it has identified additional opportunities for cost reductions and margin enhancements of more than one billion dollars, in addition to the more than one billion dollars of cost savings it achieved from its purchase of Marathon Oil, which took place last year.
ConocoPhillips net income fell to $2 billion in the second quarter, the lowest level since March 2021 when COVID-19 ravaged the demand. (Reporting from Georgina McCartney in Houston, Arathy Sommesekhar in New York, and Ernest Scheyder and Arathy Sommesekhar in Houston; editing by Nathan Crooks, David Gregorio, and David Gregorio).
(source: Reuters)
