Exxon Mobil Corporation has said that it would cut its global workforce by 15 per cent over the next two years.
Exxon’s total reduction will affect about 14,000 people, including 1,900 in the US While committed to paying out a declared cash dividend of $0.87 cents per share on the Common Stock, payable on December 10, 2020 to shareholders,.
“These actions will improve the company’s long-term cost competitiveness and ensure the company manages through the current unprecedented market conditions,” the company said in a statement.
The company’s stock has seen a 54% decrease this year and it is expected to post its third consecutive quarterly loss when it reports earnings tomorrow. Exxon also lost its standing on the Dow Jones Industrial Average index in August. The company was the longest tenured member up until that point.
The plunge in crude prices and demand for petroleum products caused by the pandemic sent shock waves through the world’s energy markets this year and came at a bad time for Exxon, which was in the middle of a costly upgrade of its oil and gas assets. Exxon is now consistently funding the payout with borrowed money for the first time in decades.
The corporation had on Friday announced an estimated third quarter 2020 loss of $680 million, or $0.15 per share assuming dilution.
Third quarter capital and exploration expenditures were $4.1 billion, bringing year-to-date spending to $16.6 billion, more than $6 billion lower than the prior year period.
Oil-equivalent production was 3.7 million barrels per day, up 1 percent from the second quarter of 2020. Production continued to reflect COVID-19 demand impacts, including economic and government mandated curtailments. Excluding entitlement effects, divestments, and government mandates, liquids production increased 2 percent, while natural gas volumes decreased 1 percent.
Depending on the outcome of the planning process, including in particular any significant future changes to the corporation’s current development plans for its dry gas portfolio, long-lived assets with carrying values of approximately $25 billion to $30 billion could be at risk for significant impairment.