The tragedy of Exxon continues. On Thursday, the company said it expects to lay off roughly 14,000 workers over the next year. The huge reduction comes even as it pays out shareholders, albeit at a flat level for the first time in nearly four decades.
The tumult hitting what was once the biggest, baddest oil company in the U.S. shows how the pandemic has accelerated the nascent decline of oil into a somersaulting downhill plunge. It also illustrates how the companies still standing will likely prioritize shareholders over workers until the bitter end.
The layoffs come amid a record slump in oil demand, which has sped up trends already underway before the pandemic. Exxon said in a press release there will be roughly 1,900 layoffs in the U.S., mostly at its headquarters in Houston. More layoffs are expected globally through next year, resulting in a 15% decrease in its workforce of contractors and full-time employees.
It’s a huge low point for a company that has had plenty over the past year. The flashpoints in Exxon’s fall include dropping out of the Dow Jones, losing the crown of the biggest oil company in the U.S., losing massive amounts of money earlier this year, and facing a write-down on a fifth of its oil reserves. Oh, and it got its ass sued for lying about climate change (again). Oh, and also getting roped into a weird Trump rally monologue.
The latter likely had no effect on the company aside from getting it dragged on Twitter. But the pandemic has had a material impact, hastening Exxon’s decline, but the company has been gliding downward for years. Part of its problem has been doubling down on oil, which has made the economy hum along for decades (thanks in part to Exxon’s aforementioned lying). A Carbon Tracker analysis released on Wednesday shows the company’s investment in exploration and resource- and carbon-intensive projects played a role in Exxon’s decline since 2014. The report notes investors “would have been better off putting their cash under the mattress” over the past six years. Climate change means the world needs to rapidly sunset the use of oil or face unspeakable horrors, and will further constrain Exxon’s future as long as it focuses on oil as its main means of making money.
Exxon is hardly alone in layoffs, though its overall totals are among the steepest in the industry. Earlier this year, BP announced it would lay off 10,000 workers as it transition to an “energy” company, a new fresh hell of greenwashing. At the time, the CEO called it the “right thing” to do. With the end of oil now coming up over the horizon, it’s more vital than ever to have a plan for affected workers who are about to or already are losing their livelihoods.
There’s no word yet on how Exxon CEO Darren Woods views the layoffs, but it stands to reason the company wouldn’t be doing them if it didn’t seem right for its strategy. Which also means its decision on Wednesday to pay dividends out to shareholders is apparently the right thing to do as well. The company has reportedly been figuring out how to do so since July despite the drop in demand and relatively low oil prices.
In doing so, it shows what Exxon really values. Along with its five-year disaster of a climate plan leaked earlier this month, it shows Exxon is intent on continuing to extract oil and expand its petrochemical business to pay out shareholders at the expense of workers and the planet. But even those dividends may run out if it continues down that path.
“Exxon has hung onto the dividend but cut first employee pensions and now jobs,” Paul Spedding, a research advisor at Carbon Tracker who authored the analysis, said in an emailed statement. “The volatile nature of employment in a cyclical industry highlights the need to plan ahead as the world moves off fossil fuels. Exxon’s plan to keep increasing production may lead to more hard times for shareholders and workers.”