Coronavirus, consolidation taking toll on energy jobs

Oil and gas companies worldwide are taking an axe to their employment rolls, shedding workers to survive what is expected to be a prolonged stretch of weak demand. Exxon Mobil Corp said it will cut its workforce by 15%, or about 14,000 people, along with oil majors Chevron Corp and Royal Dutch Shell Plc.

All told, more than 400,000 oil and gas sector jobs have been cut this year, according to Rystad Energy, with about half of those in the United States, where several big exploration companies and most large oil service companies are headquartered.

Coronavirus has devastated swathes of the global economy, with energy, travel and hospitality among the industries hit hardest. Energy companies were already struggling with weak returns, particularly those operating in U.S. shale regions, but have had to double down on cost cuts as investors pressure companies to improve margins.

Global fuel demand slumped by more than a third in the spring. While consumption has recovered somewhat, it remains lower than a year ago with major economies resuming lockdowns to contain the pandemic. The downturn has been particularly harsh in the United States, the world’s largest crude oil producer. The nation has recorded the most deaths from coronavirus, and the damage from the pandemic has sent unemployment to about 8%.

Currently, futures markets suggest crude prices may not advance beyond a barrel for at least two more years due to weak demand, and that could limit hiring.

Coronavirus, consolidation taking toll on energy jobs, Reuters, Oct 30