As a result of the COVID-19 pandemic, a number of oil and gas service companies and operators have been left with no choice but cut staff to a significant degree. But this would not be the case for ExxonMobil, says its President and Chairman, Darren Woods.
During a shareholders conference call that was held this week, the official specifically stated that there are no such plans at this time. Expounding further, Woods said ExxonMobil works pretty hard in managing the business to try to avoid such cuts. “So they’re not required. (In fact) the 15% reduction in expenses (which was made a few weeks ago) does not include any layoffs,” the Chairman said.
The official continued, “As we think about layoffs and what I’ve encouraged others to think about is they’re really in two buckets. The first is a response to significant short term developments. We have unprecedented demand drop from the pandemic. Work has dried up. And you don’t need the same number of people to manage the work.”
Woods said that this is particularly relevant in service firms. He said that ExxonMobil uses service firms and contractors to supplement its business and to manage the workload. As that workload comes off, he said ExxonMobil’s need for those reduces and therefore, it would not continue to use those service firms and contractors. As for the second bucket, he referred to this as structural changes in business which he deemed to be more of a medium to long-term horizon. In this regard, he said that the company will continue to look for ways to become more effectively.