…slips from top U.S. firms after 92 years
The United States (U.S) oil supermajor with strong footprints in Nigeria, ExxonMobil Corporation, will sack 10 per cent of its workforce as it suffered harsh economic situation heightened by COVID-19 pandemic.
The oil giant has been downgraded from top U.S. firms’ index for the first time in 92 years. The downgrade and plan to downsize were buoyed by harsh economic situation heightened by COVID-19 pandemic and leading to a sharp drop in oil demand and pricing.
The firm, according to Reuters, is taking away lavish retirement benefits that had career employees staying 30 years on average. This year’s sharp drop in oil demand and pricing has shredded the firm’s plan to spend at least $30 billion a year through 2025 to revive production and earnings by expanding in oil processing, chemicals and production, and by taking a commanding role in U.S. shale and liquefied natural gas, markets that then looked promising. Instead, the company’s management must prepare Exxon to operate in a world of weaker demand for its oil, gas and plastics.
“The company has been dropped from the Dow Jones index of top U.S. industrial companies after 92 years. It is exposing up to 10% of U.S. staff to harsh reviews that could push thousands out of the company, and is taking away lavish retirement benefits that had career employees staying 30 years on average,” Reuters reported.
Exxon declined to make an executive available for an interview, and a spokesman told Reuters that the details of cost cuts would be disclosed early next year. Ill-timed bets on rising demand have Exxon Mobil Corp facing a shortfall of about $48 billion through 2021, according to a Reuters tally and Wall Street estimates, a situation that will require the top U.S. oil company to make deep cuts to its staff and projects.
Wall Street investors are even starting to worry about the once-sacrosanct dividend at Exxon, which in the 20th Century became the world’s most valuable company using global scale, relentless expansion and strict financial controls.
Exxon weathered a series of setbacks last decade and under Chief Executive Darren Woods, sought to return to past prominence by big bets on U.S. shale oilfields, pipelines and global refining and plastics. It also bet big on offshore Guyana, where it discovered up to eight billion barrels of oil, six years of production at its current rate