Oil and gas producer ConocoPhillips will slash up to a quarter of its global workforce amid a broader restructuring program, a company spokesperson confirmed on Wednesday.
Employees received an email Wednesday morning containing an internal video message from CEO Ryan Lance detailing the plans, several ConocoPhillips sources told Reuters.
Lance told employees that rising costs had left the company behind its peers.
The company, which has its global headquarters based in Houston, Texas, is set to hold an employee town hall meeting on Thursday morning at 8 a.m. Mountain Time, the sources said.
ConocoPhillips has approximately 13,000 employees globally, meaning between 2,600 and 3,250 employees will be affected.
The company’s Canadian headquarters are located in Calgary and it has operations in the Alberta oil sands and northern British Columbia, but the company told Global News it is not providing specific numbers on job cuts by country or region.
According to ConocoPhillips 2024 annual report, about 8 per cent of the company’s workforce — about 950 people — are employed with its Canadian operations.
ConocoPhillips’ Canada is headquartered in Calgary and has operations in northeastern British Columbia and the Alberta oilsands.
Courtesy: ConocoPhillips
In an email to Global News, a spokesperson for ConocoPhillips, Dennis Nuss, said “we are always looking at how we can be more efficient with the resources we have. As part of this process, we have informed employees that a 20 to 25 per cent reduction in our global workforce, which includes employees and contractors, is anticipated.”
Nuss said most of the cuts are expected to be made before the end of the year.
The new company structure and management team is expected to be made public in mid-September, and the new organization will be implemented by 2026, according to sources.
News of the layoffs are just the latest in North America’s energy industry after Chevron announced layoffs earlier this year, as did oil field service company SLB.
In April, two sources told Reuters that Houston-based ConocoPhillips had hired management consulting firm Boston Consulting Group to advise on the restructuring and layoff
program, referred to internally as “Competitive Edge.”
ConocoPhillips’ net income shrank in the second quarter to about $2 billion (US), the lowest since the quarter ended March 2021, when COVID-19 ravaged oil demand.
The company warned of uncertainty and volatility in the markets in May, adding that it was looking to boost capital efficiency and reduce costs across the entire organization.
–with files from Global News