The tragedy of Exxon continues. On Thursday, the corporate said it expects to put off roughly 14,000 employees over the next year. The large discount comes even because it pays out shareholders, albeit at a flat degree for the primary time in almost 4 a long time.
The tumult hitting what was as soon as the most important, baddest oil firm within the U.S. exhibits how the pandemic has accelerated the nascent decline of oil right into a somersaulting downhill plunge. It additionally illustrates how the businesses nonetheless standing will seemingly prioritize shareholders over employees till the bitter finish.
The layoffs come amid a file stoop in oil demand, which has sped up tendencies already underway earlier than the pandemic. Exxon mentioned in a press release there will probably be roughly 1,900 layoffs within the U.S., largely at its headquarters in Houston. Extra layoffs are anticipated globally by means of subsequent yr, leading to a 15% lower in its workforce of contractors and full-time staff.
It’s an enormous low level for an organization that has had a lot over the previous yr. The flashpoints in Exxon’s fall embody dropping out of the Dow Jones, losing the crown of the most important oil firm within the U.S., losing massive amounts of money earlier this yr, and facing a write-down on a fifth of its oil reserves. Oh, and it got its ass sued for mendacity about local weather change (once more). Oh, and likewise getting roped right into a weird Trump rally monologue.
The latter seemingly had no impact on the corporate except for getting it dragged on Twitter. However the pandemic has had a cloth influence, hastening Exxon’s decline, however the firm has been gliding downward for years. A part of its downside has been doubling down on oil, which has made the economic system hum alongside for many years (thanks partially to Exxon’s aforementioned mendacity). A Carbon Tracker analysis launched on Wednesday exhibits the corporate’s funding in exploration and resource- and carbon-intensive initiatives performed a task in Exxon’s decline since 2014. The report notes traders “would have been higher off placing their money beneath the mattress” over the previous six years. Local weather change means the world must quickly sundown using oil or face unspeakable horrors, and can additional constrain Exxon’s future so long as it focuses on oil as its most important technique of making a living.
Exxon is hardly alone in layoffs, although its general totals are among the many steepest within the business. Earlier this yr, BP introduced it will lay off 10,000 employees because it transition to an “power” firm, a brand new contemporary hell of greenwashing. On the time, the CEO called it the “proper factor” to do. With the tip of oil now developing over the horizon, it’s extra important than ever to have a plan for affected employees who’re about to or already are dropping their livelihoods.
There’s no phrase but on how Exxon CEO Darren Woods views the layoffs, however it stands to cause the corporate wouldn’t be doing them if it didn’t appear proper for its technique. Which additionally means its determination on Wednesday to pay dividends out to shareholders is seemingly the proper factor to do as nicely. The corporate has reportedly been figuring out how to do so since July regardless of the drop in demand and comparatively low oil costs.
In doing so, it exhibits what Exxon actually values. Together with its five-year disaster of a climate plan leaked earlier this month, it exhibits Exxon is intent on persevering with to extract oil and broaden its petrochemical enterprise to pay out shareholders on the expense of employees and the planet. However even these dividends might run out if it continues down that path.
“Exxon has hung onto the dividend however minimize first worker pensions and now jobs,” Paul Spedding, a analysis advisor at Carbon Tracker who authored the evaluation, mentioned in an emailed assertion. “The unstable nature of employment in a cyclical business highlights the necessity to plan forward because the world strikes off fossil fuels. Exxon’s plan to maintain growing manufacturing might result in extra laborious instances for shareholders and employees.”
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