Benzinga | Oct 6, 2020 12:21AM EDT

Exxon To Ax 1,600 Jobs Across Europe As Pandemic Forces Cost Cuts

Texas-headquartered Oil and Gas company Exxon Mobil Corporation (NYSE:XOM) announced plans on Monday to cut jobs across its affiliates in Europe. The country-specific impact of the layoffs is still uncertain, and the decision would be based entirely on the company's presence in the local markets and the prevailing market conditions.

In the last six months, Exxon stock has dropped close to 17%, and approximately 52% on a year-to-date basis.

What Happened Exxon's plan to reduce staff is driven by cost competitiveness and it estimates up to 1,600 employees across Europe could face the ax by the end of next year. According to the Financial Times, this represents more than one-tenth of its total headcount in the European region.

In an earnings guidance shared last week, the company said it expected to post anywhere between a loss of 68 cents and a profit of 7 cents in the current quarter, primarily due to the impact of the COVID-19 pandemic.

Why Does It Matter The Oil and Gas sector has suffered a severe drop in demand since the pandemic outbreak and FT reported that petroleum producers have taken significant steps to cut costs.

Last week, Royal Dutch Shell Plc (NYSE: RDS-A) announced plans for a major business overhaul which could lead to 10% job cuts, according to Reuters. By the end of 2022, Shell might lay off 7,000 to 9,000 staff, which includes around 1,500 employees quitting voluntarily.

In June CNBC reported that the British oil company BP Plc (NYSE:BP) would layoff 10,000 employees by the end of the year i.e. approximately 15% of its workforce.

Price Action Exxon stock closed 2.30% higher at $33.74 on Monday.

Photo by Mike Mozart on Flickr