Oil and gas heavyweight ConocoPhillips is moving forward with layoffs as part of a sweeping restructuring effort, the company disclosed this week. The Houston-based energy corporation acquired Marathon Oil Corp. for $22.5 billion last November, a deal which now precedes an anticipated reduction in workforce. According to a Houston Business Journal report, ConocoPhillips has not confirmed the exact number of job cuts nor if Houston employees will be particularly affected.
In what's being called internally "Competitive Edge," management consulting firm Boston Consulting Group has been hired to advise the energy firm on its restructuring plans, Reuters revealed, citing two undisclosed sources. The company is, it seems, looking to reign in its operational expenses by centralizing certain functions that were formerly managed across its six operating segments. With oil prices wavering around $63 a barrel, these layoffs are seen as part of a broader industry trend to scale back on costs amidst more restrictive fiscal conditions.
"We are always looking at how we can be more efficient with the resources we have. As part of this process, we have informed employees that workforce reductions are anticipated," a ConocoPhillips spokesperson stated, although specific details regarding the layoffs are expected to be announced in the fourth quarter of the year. As of the end of 2024, the company reported approximately 11,800 employees across 14 countries, as per Reuters' report.
The job cuts at ConocoPhillips come on the heel of similar moves by other industry players like Chevron and SLB, who also announced workforce reductions earlier in the year. Moreover, reports from Reuters earlier this month suggest that ConocoPhillips is also looking to divest some assets acquired from the Marathon Oil purchase, including oil and gas properties in Oklahoma. These steps are indicative of an industry facing headwinds and adjusting to a new normal in the market. The energy sector's reliance on stable pricing is being tested, with many companies claiming an inability to drill profitably if oil prices dip below $65 a barrel.
This isn't the first round of layoffs for ConocoPhillips or Marathon Oil, as both have previously downsized their workforces in response to fluctuating market demands and the COVID-19 pandemic, which sent energy prices plummeting. In 2020, ConocoPhillips handed out pink slips to up to 500 Houston employees, and Marathon Oil laid off more than 500 workers in Texas before being acquired by ConocoPhillips.
