(Substack)—ConocoPhillips, a major player in the U.S. oil and gas sector, has revealed plans to reduce its global workforce by 20 to 25 percent, impacting between 2,600 and 3,250 employees out of approximately 13,000. This move comes roughly a year after the company completed its $17 billion acquisition of Marathon Oil, a deal that promised significant cost synergies but now underscores the harsh realities facing the industry amid fluctuating oil prices and rising operational expenses.
The layoffs, largely expected to wrap up by the end of this year, are part of a broader restructuring effort internally dubbed “Competitive Edge.” Company spokesperson Dennis Nuss emphasized the drive for efficiency, stating, “We are always looking at how we can be more efficient with the resources we have.”
This sentiment reflects a pragmatic approach in an environment where every dollar counts, especially as U.S. crude prices hover around $64 per barrel—enough to sustain operations but a notable drop from the $77 average seen in 2024, squeezing margins across the board. Such price volatility has forced producers to rethink their strategies, prioritizing leaner operations over expansion.
CEO Ryan Lance addressed employees directly in a video message, acknowledging the human toll of these decisions. “I know these changes create uncertainty, and they are unsettling,” he said.
Lance’s words highlight the difficult balance leaders must strike between empathy for affected workers and the imperative to safeguard the company’s long-term viability. He further explained the underlying pressures, noting that “costs have risen by about $2 per barrel, making it harder for the company to compete.”
Specifically, controllable costs have climbed to $13 per barrel in 2024 from $11 in 2021, a trend that Lance tied to broader inflationary forces and supply chain disruptions that have plagued the sector. These increases stem in part from higher prices for essential materials like steel and aluminum, exacerbated by trade policies aimed at protecting domestic industries but inadvertently hiking input costs for energy producers.
Elaborating on the need for restructuring, Lance stated, “As we streamline our organization and take work out of the system, we will need fewer roles.”
This straightforward assessment points to the efficiencies gained from the Marathon Oil merger, which has already delivered over $1 billion in cost savings, with an additional $1 billion in reductions identified recently. Mergers like this one allow companies to eliminate redundancies, consolidate operations, and focus on high-value assets, but they often come at the expense of jobs as overlapping functions are streamlined.
ConocoPhillips has also moved to divest non-core assets, such as those in the Anadarko Basin for $1.3 billion, further sharpening its portfolio amid a market where OPEC’s output decisions continue to influence global supply.
The announcement sent ConocoPhillips shares tumbling 4.5 percent to $94.55, underperforming the broader S&P 500 Energy Index’s 2.6 percent decline that day. Year-to-date, the stock has slipped 4.7 percent, contrasting with a modest gain in the energy index. Financially, the company’s second-quarter net income dipped to about $2 billion, a 15 percent drop year-over-year and its lowest since early 2021, when pandemic disruptions hammered demand.
ConocoPhillips is not alone in this belt-tightening. Chevron, another U.S. heavyweight, plans to shed up to 20 percent of its staff, potentially affecting 9,000 workers, while firms like SLB and BP have also trimmed headcounts. Dan Pickering, chief investment officer at Pickering Energy Partners, captured the industry’s mindset succinctly: “Companies are figuring out how to do more with less.”
This ethos is evident across the oil patch, where capital expenditures are being slashed—ExxonMobil and Chevron alone have reduced spending by about $1.8 billion this year—as producers abandon rigs and refocus on profitability over volume.
Beyond energy, the job cuts align with a nationwide surge in layoffs, up 140 percent from last year, with over 800,000 positions eliminated across sectors in 2025 alone. Retail giants like Walmart and Procter & Gamble, along with tech behemoths such as Microsoft, Amazon, and Intel, are undergoing similar reductions, often replacing roles with automation or shifting priorities to AI investments. In the oil and gas arena, however, the challenges are compounded by policy shifts that promise long-term benefits—like faster permitting and more lease sales—but offer little immediate relief against current market headwinds.
As ConocoPhillips prepares to unveil its new organizational structure in mid-September and complete the reorganization by 2026, the focus remains on emerging stronger. For an industry that has achieved record production levels despite a shrinking workforce over the past decade, these measures underscore a commitment to adaptability in the face of economic pressures.
