Energy sector which is suffering most during this global pandemic is now cutting off jobs to survive in weak demand of oil&gas.
Exxon mobile, one of the largest oil producers in the U.S. is going to reduce its workforce by 15%. First time in Company history, dividends were unchanged due to poor economic outlook. Chevron and Royal Dutch shell is also slashing jobs as energy demand is not going up anytime soon
It is estimated that approx. 400,000 jobs will be lost only in the oil & gas sector this year, half of those only in the united states, which has headquarters of major oil and gas producers.
Due to the current pandemic industries such as travel and hospitality, energy, got the hardest hit at an epic scale. Even before the Corona virus spread, energy companies were struggling especially in the U.S shale regions due to low returns.
Australia’s largest petroleum company, Woodside also reducing their workforce along with Canada’s Cenovus Energyannounced plans in recent weeks to cut staff.
U.S. Energy Secretary Dan Brouillette said that it is not possible in near time to return to the peak supply of 13 million BPD, because shale industry has been hit hard and cracking technology is expensive which make easy for oil companies to cut staff and spend in other sectors.
Fracking was also a hot topic during the presidential election campaign. Trump is in favour of fracking, pushing for more drilling while Biden wants to limit fracking on federal lands.
Merging is also helping to slash jobs. Chevron who recently bought Noble Energy wants to get rid of 25% of Noble Energy staff. Shell said that 10% of its workforce has to go and Cenovus said it will layoff 25% of its staff after it buys Husky Energy
PetroChina is the only company which reported an increase of 350% to its profit compared to a year ago.
Analysts predicting that crude prices may not go above $40 barrel per day for at least two more years due to low demand which can result in limited or no hiring.