Exxon plans to cut up to 10% of U.S. office jobs annually over the next several years

0

Through Kevin Crowley and Joe Carroll at 06/21/2021

Darren Woods, CEO of Exxon Mobil

HOUSTON (Bloomberg) –Exxon Mobil Corp. is preparing to downsize its US offices by 5-10% per year over the next three to five years by using its performance appraisal system to spot underperformers, according to people familiar with the matter .

The cuts will target lower-rated employees relative to their peers and, for that reason, will not qualify as layoffs, the people said, asking not to be identified as the information is not public. While these workers are usually put on a so-called performance improvement plan, eventually many would have to go on their own. This year’s assessment is taking place now, but affected employees have yet to be notified, people said.

“Our annual performance review process has taken place over the past few months,” Exxon spokesperson Casey Norton said in an email. “When employees are not contributing to their highest capacities, they may need to participate in an improvement plan. This is an annual process that has been in place for many years and is intended to improve performance. This process is unrelated to downsizing plans.

The plan is separate from Exxon’s announcement last year that it will cut 14,000 jobs globally by 2022, and it would extend the cuts well beyond that initial period. It’s a tumultuous time for Exxon, which is still grappling with the fallout from last month’s annual meeting, when shareholders pushed back senior management and replaced a quarter of the company’s board over climatic reasons. and financial.

Exxon had 72,000 employees worldwide at the end of last year, 40% of whom worked in the United States, according to a company file.

White Collar Jobs

Several high profile traders have also left in recent weeks. While the performance review process primarily applies to white collar jobs such as engineering, finance, and project management, there is no suggestion that commercial departures were related to the review program.

Exxon’s other cost-cutting initiatives have included suspension of bonuses and halting matches between employee contributions and 401,000 savings plans as the pandemic crushed demand for crude, forcing the company a record annual loss.

International crude prices have jumped 44% this year to nearly $ 75 a barrel, significantly improving Exxon’s financial position. Still, the supermajor still has a way to go to pay off debts accumulated during the market collapse of 2020. A smaller, more efficient workforce is the key to further improvements.

Exxon achieved $ 3 billion in annual “structural cost reductions” in 2020 and will continue to save through 2023, CEO Darren Woods said at the May annual meeting.

“We have additional work to continue to take advantage of the new organization and find opportunities to reduce our costs,” said Woods.

Exxon shares rose 3.6% to $ 62.59 at the close of the New York Stock Exchange as part of a large rally of energy stocks on stronger oil prices.

Share.

About Author

Leave A Reply