US oil titan ExxonMobil is set to cut 1,600 jobs in Europe in an alarming trend for the industry as companies struggle to deal with the aftershock of the coronavirus pandemic.
ExxonMobil
The corporation, who is by far the US's biggest oil company by market capitalisation, announced in a statement on Monday that the virus had "increased the urgency" of reducing its costs and the said that job losses would be made by the end of the year.
They are hardly the first oil company to resort to layoffs in the wake of the pandemic: Shell announced last week of its intention to let go of 10% of its workforce as it attempts to shift towards a greener energy model.
The entire industry has been struggling during the pandemic, owing to a lack of travel, causing planes to be grounded and cars to go unused, significantly reducing the demand for fuel since lockdown restrictions were put in place back in March.
The restrictions have also taken their toll on the travel industry, with various authorities being petitioned to open up travel again to stop several companies and sectors going under in the face of a potential economic collapse.
In total, the job cuts equate to more than a tenth of its European workforce, with Exxon employing more than 75,000 globally at the end of last year.
2020 has been hard on the oil titan, with it being surpassed in value by US renewable energy provider NetExtra Energy last week, which followed its removal from the Dow Jones Industrial Average after more than a century.
In addition, the group's share value has decreased by more than half over the course of the year.
A spokesman for the company said in a statement: "Significant actions are needed at this time to improve cost competitiveness and ensure the company manages through these unprecedented market conditions."
Oil prices tumbled as a result of the pandemic, with some countries even seeing the price of oil drop below zero for the first time in history, which critics have noted highlights the unsustainability of the oil and gas sector. West Texas Intermediate, considered the US benchmark for crude oil, traded in negative territory for the first time.
While prices have bounced back, producers have cut costs significantly. ExxonMobil announced in July it had reduced capital and exploration spending by about $2 billion (€1.69 billion) compared to the first quarter, and that it had identified "significant potential for additional reductions."
Other companies that have announced cuts include BP, who are set to axe 10,000 jobs and Royal Dutch Shell, who is due to cut 9000 jobs by the end of 2022. Additionally, Schlumberger is currently in the process of downsizing by around a fifth - roughly 21,000 roles.
ExxonMobil has also forecast its third quarterly loss in a row, having previously announced a revenue loss of $1.1 billion (€933 million) in the second quarter of 2020.
The company did not specify where exactly job losses would take place, saying that country-specific impact would "depends on the company's local business footprint and market conditions."
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