Everything we know about job cuts at Exxon Mobil

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Exxon, the largest oil company in the US, has long pitched itself as a stable giant in a volatile industry. Part of that pitch is that it doesn’t do layoffs.  Even as the price of oil crashed in the spring, forcing its peers including BP and Chevron to cut thousands […]

Exxon, the largest oil company in the US, has long pitched itself as a stable giant in a volatile industry. Part of that pitch is that it doesn’t do layoffs. 

Even as the price of oil crashed in the spring, forcing its peers including BP and Chevron to cut thousands of workers to save costs, Exxon avoided mention of job cuts. 

The company took an alternative approach, using its annual performance-review process to trim its ranks. Twenty current and former employees we talked to said changes to the performance-review process were a way for the company to hide mass layoffs.

Now, with oil down about 30% from the start of the year, Exxon appears to be changing its tune on job cuts, at least through internal communications.

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As we reported Monday, Exxon is weighing cuts in countries around the world with high costs of labor, citing the market downturn. Employees in Australia have already been offered the opportunity to leave the company voluntarily in exchange for severance and outplacement services, according to a company representative and a document seen by Business Insider.

Here’s everything we know about job cuts at Exxon.

Do you have a tip about Exxon? Reach out to this reporter at [email protected] or through the encrypted messaging app Signal at 646-768-1657.

FILE PHOTO: Darren Woods, Chairman & CEO of Exxon Mobil Corporation attends a news conference at the New York Stock Exchange (NYSE) in New York, U.S., March 1, 2017. REUTERS/Brendan McDermid

Darren Woods, the chairman and CEO of Exxon Mobil.

Reuters


Exxon is using performance reviews to cut staff

Employees at Exxon are ranked each year against their peers by performance. Those who are ranked at the bottom are at risk of getting cut.

In April, Exxon changed its policy, requiring that managers put 8 to 10% of salaried workers into the bottom category, regardless of whether they see them as poor performers. Before that, the minimum was 3%, and for newer hires there was no minimum at all. 

US employees ranked in the bottom category are forced to resign, retire, or enroll in a performance-improvement plan, which is difficult to pass, according to two people familiar with Exxon’s internal human-resources policies.

More than 20 current and former employees told Business Insider that Exxon was hiding mass layoffs in these performance-based cuts, and a recording of an internal meeting we obtained showed that HR staff at Exxon knew some people who were ranked at the bottom didn’t deserve to be there.

Exxon said in late July that it didn’t have a target to reduce its workforce through the performance-review process.

Exxon gas station

An Exxon gas station in Clark, New Jersey.

Michael Loccisano/Getty Images


Exxon started publicly warning of layoffs in July

Exxon started hinting at job cuts during the company’s second-quarter earnings report, which showed it lost over $1 billion. On a call with investors to discuss the financial results, Exxon said there could be cuts to management positions, which would take effect next year.

The potential cuts are linked in part to lower levels of activity, Neil Chapman, a senior vice president on Exxon’s corporate-management committee, said on the call. He didn’t say how many jobs could be cut.

“The company is undertaking a comprehensive look at additional cost reductions, based on long-term structural efficiencies, reduced activity, and an evaluation of workforce requirements,” Exxon said in a statement to Business Insider on August 6. “We do see the potential for further reductions, including in overhead and management positions.”

Exxon gas station



Kena Betancur/VIEWpress/Corbis via Getty Images


An internal document shows Exxon is considering job cuts in its oil-exploration and -production business

Exxon is now weighing job cuts in its upstream division, which is focused on oil exploration and production, according to an internal memo reviewed by Business Insider.

“Unfortunately, we continue to see prolonged negative market impacts that require us to make further changes so we are best positioned to take advantage of market improvements when they occur,” the memo, sent to employees Monday, said.

Any cuts, including those that extend beyond upstream, will be determined by what Exxon calls “study work” — a review of spending in high-cost countries, likely including the US, to determine how to slash costs, according to an employee familiar with the matter.

The memo doesn’t say how many roles may be cut or provide a timeline. Exxon has about 16,500 workers in its upstream business, the employee said.

“Our study work continues on a country-by-country basis, and we will communicate any changes with our employees when it’s appropriate,” Ashley Alemayehu, an Exxon representative, said Monday. “As for the overall workforce transformation and where work might be done in the future, no decisions have been made.”

Exxon is giving some workers incentives to quit the company 

On Wednesday, Exxon’s president of fuels and lubricants, Ian Carr, sent a memo to employees in that department indicating the company has offered workers in Australia the option to participate in a voluntary redundancy program.

The program includes outplacement services and a severance package based on length of employment, Casey Norton, an Exxon representative, told Business Insider. 

“Employees who elect to take part in the voluntary program will be asked to offer expressions of interest through September,” the memo said. “The details of other potential redundancy support that may be offered in other countries, as well as the design of the program, will vary.”

Exxon will consider all Australian employees who express interest in the program, Norton said.

“We have no plans for an involuntary program at this time,” he added.

Do you have a tip about Exxon? Reach out to this reporter at [email protected] or through the encrypted messaging app Signal at 646-768-1657.

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