Supermajors Slim Down to Protect Shareholder Payouts
The world’s biggest international oil and gas firms are accelerating layoffs this year in search of further cost cuts and greater efficiency amid industry consolidation, weaker oil prices, and technology advances.
Big Oil promised investors efficiency and cost savings last year, when oil prices normalized from the highs of $100 per barrel in 2022 that brought windfall profits to the industry in 2022 and 2023. Earnings “normalized” in 2024 and have trended lower from the prior years so far in 2025, prompting the top oil and gas firms to seek additional cost savings at oil prices in the $60s per barrel, compared to an average Brent crude oil price at $81 per barrel in 2024.
The huge profits of 2022 were also followed by a wave of consolidation, especially in the United States, where the supermajors ExxonMobil and Chevron, as well as ConocoPhillips, announced multi-billion-dollar deals to expand their footprint in the shale business and in the global hotspots for exploration and production.
The mergers and the lower oil prices are prompting layoffs across the sector, with the number of office-based employees and contractors shrinking, as companies have pledged billions of U.S. dollars in cost savings and slimmer corporate structures. That’s to eliminate inefficiencies and excessive costs while keeping payouts to shareholders at much lower prices compared to the 2022 highs.
Technology and the advance of robotics tools and AI are also eliminating some positions, and this trend is expected to continue going forward.
Big Oil Layoffs Accelerate
The latest oil major to announce thousands of job cuts was ExxonMobil, which earlier this week said it would slash 2,000 jobs worldwide, with nearly half of these cuts at its Canadian business, Imperial Oil.
Exxon has already eliminated about 400 jobs in Texas since it acquired Pioneer Natural Resources in a $60-billion deal finalized in May 2024.
Now Exxon is joining the other U.S. supermajor Chevron, as well as ConocoPhillips and BP, to announce a few thousand job cuts.
A restructuring at Imperial Oil will reduce employee roles by about 20% by the end of 2027, the company said on Monday.
“As part of this change, Imperial will further consolidate activities to its operating sites, enhancing collaboration, operational focus and execution excellence,” Imperial Oil said.
“Our global office network was established decades ago under very different circumstances,” a spokeswoman for Exxon told The Wall Street Journal by email.
“To support the collaboration so critical to our success, we are aligning our global footprint with our operating model and bringing our teams together.”
Exxon is not alone in seeking greater efficiencies and cost savings by reducing overhead costs.
Chevron, which bought Hess Corporation for $53 billion, has said it would reduce its workforce by 20% by the end of 2026 as part of wide cost cuts. This includes 800 jobs in the Permian.
ConocoPhillips, which acquired Marathon Oil Corporation last year, plans to slash workforce numbers by up to 25% across functions and geographies to simplify the organization and cut costs.
UK-based BP, which is under intense shareholder pressure to slash costs and reduce debt, said in August that it was accelerating the reduction of contractor numbers and office-based workforce.
“Across the supply chain, we’ve delivered around $900 million of savings. Over a third of our supply chain spend reductions seen so far reflect a reduction in contractors, significantly enabled by technology,” BP’s chief financial officer Kate Thomson said on the Q2 earnings call.
BP has already reduced contractor numbers by 3,200, and expects a further 1,200 contractors to exit by the end of 2025.
“Beyond that, we will continue to rigorously review the remaining contractor activity across our businesses and functions,” Thomson added.
Moreover, BP expects its ongoing organizational transformation to see 6,200 roles impacted by the end of 2025, out of an office-based workforce of 40,000 employees.
“With a majority of the exits anticipated in the fourth quarter of 2025, we expect material incremental savings from the first quarter of 2026,” the executive said.
Job Cuts Hit The Industry
But it’s not only the supermajors that are seeking cost savings by reducing workforce numbers. Companies in the U.S. shale patch are on the hunt for consolidation, synergies, efficiencies, and cost cuts to be able to sustain shareholder payouts at U.S. oil prices in the low $60s per barrel, and possibly lower later this year.
They expect to ride the price decline with minimal tweaks to strategies, for now.
The first tweaks include deferring well completions and pumping more with less—meaning jobs have to go.
The slwoing drilling activity has spilled over to the oilfield services groups. Halliburton, for example, is said to have initiated layoffs in at least three business units, with headcount reductions ranging from 20% to 40%. These reductions come amid rising costs, weaker prices, and heightened volatility across the sector.
“The oil and gas industry has slowed dramatically due to low prices and increased cost of raw and finished material and supplies,” an executive at an oilfield services firm said in comments to the latest Dallas Fed Energy Survey last month.
“Operators are less prone to utilize outside services and continue to reduce their own workforces.”
Another executive, at an exploration and production firm, said, “The administration is pushing for $40 per barrel crude oil, and with tariffs on foreign tubular goods, [input] prices are up, and drilling is going to disappear. The oil industry is once again going to lose valuable employees.”
