More than 500 Marathon Oil employees in Houston are facing layoffs following the company's $22.5 billion merger with ConocoPhillips, a move that could reshape the local economy. The detailed plans of staff consolidation were first shared in a letter Marathon sent to the Texas Workforce Commission, which was reported by the Houston Business Journal.
The Houston Business Journal's Naomi Klinge reported that the layoffs were announced through the Worker Adjustment and Retraining Notification (WARN) Act, with Marathon indicating a 12-month period for staff reductions post-merger. In a letter obtained by the Houston Chronicle, senior vice president of human resources Jill Ramshaw stated that employees at Marathon's facility on 990 Town and Country Blvd will be let go, although precise employment end dates will be given within a month of the merger's close.
While some of the affected staff will be kept on for transition roles, the specifics of which are still being finalized, Houston is poised to feel the impact on its workforce. Houston Business Journal received word from Patrick Jankowski, the Greater Houston Partnership VP of research, who told reporter Marissa Luck that these layoffs won't affect oil output but will certainly be a blow to those losing their jobs.
As part of the merger's fallout, according to Chron, ConocoPhillips has projected cost savings of around $500 million annually, with an expectation to reduce general and administrative expenses by $250 million. Unfortunately, despite previously issued communication by ConocoPhillips’ CEO Ryan Lance that cost-saving measures would not result in a reduced workforce for ConocoPhillips, Marathon employees eagerly hoped not to receive the same assurance.
With the expectation of retaining its west Houston facility, Marathon is expected to make strategic decisions to streamline operations. This strategic move by the company reflects a broader trend as reported by Reuters in September citing Shell Global's intention to reduce its oil and gas exploration staff by 20 percent, targeting operational cost reductions as high as $3 billion by 2025.
