Are More ConocoPhillips Layoffs on the Way After Budget Cut?
One of America’s largest oil companies, ConocoPhillips, has slashed its capital budget by 10%, sparking fears of possible ConocoPhillips layoffs in 2017.
ConocoPhillips released its third-quarter earnings on Thursday, which beat analysts’ estimates. However, the company later dropped a bombshell, saying it was planning to slash its budget. This ostensibly translates into the company likely making further job cuts this year.
Speculation about ConocoPhillips layoffs is certainly not ill-founded, as the company has had a track record of shedding a certain number of employees every year in the past decade.
The company’s global workforce has shrunk from 33,800 employees in 2008 to just over one-third of that number today. According to the ConocoPhillips website, the company currently employs about 12,200 workers, which is down from 13,300 just a year ago.
ConocoPhillips Layoffs Part of Cost-Saving Moves
In July, I reported about ConocoPhillips layoffs in Bartlesville, Oklahoma, where employees have intermittently faced job cuts. ConocoPhillips has shed over 1,000 jobs in a targeted headcount reduction since last year. Naturally, the company’s Houston headquarters have been bearing the brunt of repeated ConocoPhillips job cuts.
Employee costs are a significant burden for the company. In the third quarter, the company had to make an unexpected $600.0 million contribution to its employees’ U.S. pension plan after the fund ran short.
Despite the high expenses, the company managed to turn a profit this year after experiencing losses in the same period a year ago. ConocoPhillips reported earnings of $420.0 million in the third quarter, compared to losses of $1.04 billion in the same quarter in 2016.
The company partly owes its powerful comeback to the reversal in the price of oil. Oil prices, which dropped to multi-year lows last year, are finally beginning to rebound. However, part of the company’s impressive numbers are a result of its ongoing efforts to control costs and improve operational efficiency.
With the oil giant planning to continue its cost-cutting efforts, chances are that we’ll be hearing of more ConocoPhillips layoffs in the year to come.
“ConocoPhillips’ profit beats estimates, but budget cut 10 percent,” Reuters, October 26, 2017.
“Number of employees at ConocoPhillips from 2008 to 2016,” Statista, Last accessed October 26, 2017.