ExxonMobil’s CEO, Darren Woods, has emailed his employees that the company is “very close” to finalising job reviews in the US and Canada and expects to announce job cuts soon. The layoffs are part of Exxon’s efforts to redesign how it works and to increase competitiveness. Woods said that Exxon had exceeded a target to cut opex by $1 billion and capex by $10 billion. However, the coronavirus pandemic has cut oil demand by about 20%, five times the decline of the 2008 financial crisis.
Exxon reported a loss of nearly $1.7 billion in the first half of 2020, with a third-quarter loss expected at $1.17 billion. The US second-largest oil company borrowed $23 billion to shore up a constrained balance sheet and an annual dividend payment of nearly $15 billion. The company is slower in responding to the downturn compared to rivals. Previously, BP and Shell said they would cut up to 15% workforce while Chevron had requested workers to reapply for their jobs.
All oil and gas companies face the same demand collapse. However, Exxon has the burden to meet the promised huge dividend. At 10.3%, Exxon’s dividend yield is the largest among competitors. On Wednesday, the company's shares lost 1.6% to $33.14, near an 18-year low.
