REFILE-ConocoPhillips plans layoffs as part of broad restructuring
ConocoPhillips plans to reduce staff. The company announced this on Tuesday. This is part of a broader effort to control costs and streamline operations following its $23 billion purchase of Marathon Oil.
Job cuts are a sign of the pain that the oil and gas sector is experiencing as it faces higher costs and lower revenue due to prices hovering around $63 per barrel. Many companies claim they can't drill profitably at oil prices below $65 per barrel.
Chevron, SLB and other oil giants announced their own layoffs in the first half of this year.
Two sources confirmed that Houston-based ConocoPhillips has hired Boston Consulting Group as a management consulting firm to help with the restructuring and layoffs program. This is internally referred to as "Competitive Edge".
Sources declined to name themselves as the discussion was confidential.
Two sources confirmed that ConocoPhillips began by restructuring its operations, and has announced the centralization of some functions.
According to its annual report, the company had previously six operating segments: Alaska, Lower 48, Canada, Europe, Middle East, and North Africa, Asia Pacific, and Other International.
One source said that the reorganization of corporate and support functions will follow the restructuring of operations.
We are always trying to be more efficient. ConocoPhillips' spokesperson stated that as part of the process, they have informed their employees about anticipated workforce reductions.
Four sources have said that details of the layoffs will be announced in the fourth quarter this year. Three sources said that the company hasn't determined how many people will be affected by the layoffs.
According to the company's annual report, it will have approximately 11,800 employees spread across 14 countries by 2024.
ConocoPhillips grew in recent years by acquiring large companies. ConocoPhillips has consolidated its position with the acquisition of Marathon Oil in 2017 and its purchase of Concho Resources by 2021.
In 2020, the company will lay off 500 Houston workers as COVID-19 has reduced global energy demand. This is also lowering energy prices. Marathon Oil also laid off over 500 employees in Texas ahead of the merger with ConocoPhillips.
One source said that ConocoPhillips was also looking to divest some of its assets. Reports earlier this month said that the company was looking to sell oil and gas assets it acquired from Marathon Oil's $22.5 billion acquisition last year. Reporting by Sheila Dang in Houston and Ernest Scheyder; editing by Liz Hampton, Lisa Shumaker
(source: Reuters)
