In the wake of a $60 billion acquisition deal, ExxonMobil, the leading American producer of gas and oil, has announced layoffs as part of a workforce restructuring.
According to a recent filing with the Texas Workforce Commission, the oil and gas company with headquarters in Texas will see layoffs imminently.
Significant Acquisition
The layoffs have been brought about as a result of a significant acquisition, which necessitated some workforce reorganization. In a $60 billion deal in May, Exxon bought Pioneer Natural Resources, another Texas company that specializes in hydrocarbon exploration.
A Worker Adjustment and Retraining Notification issued late last month confirmed that Exxon will lay off 59 Pioneer employees at the end of September.
Locations of Layoffs
39 of these workers are employed at the Pioneer headquarters in Irving, Texas, in Las Colinas, a community development governed by The Las Colinas Association, a Texas non-profit corporation.
There are currently 18 employees working in three Midland locations, including the downtown office. Big Lake is home to two additional employees.
Transition Role Offers
According to a statement from the company, those who have been given notices of layoffs have been offered transition roles at Exxon, but some of them have decided not to join the company. The company hasn’t said yet how many people will stay and how many will move on.
Pioneer had 2,200 employees when it was acquired. More than 1,500 employees have been offered positions with Exxon since the merger in May.
“Employment Strategy”
In a letter to the state Workforce Commission, Exxon’s public and government affairs manager Jared Woods stated, “Our employment strategy has not changed.”
“The success of this merger depends heavily on the retention of Pioneer’s talented workforce, and more than 1,500 Pioneer employees were offered jobs as part of the merger.”
FTC Approval
The $60 billion merger was the organization’s biggest deal in 25 years since it obtained Mobil in 1999 for $81 billion.
The reason the deal was approved by the Federal Trade Commission was because ExxonMobil agreed to prevent Pioneer’s founder, Scott Sheffield, from serving on the board of directors or as an advisor.
Raising Oil Prices
In late 2023, Sheffield, who was the company’s founding CEO in 1997, officially resigned. The FTC claimed earlier this year that Sheffield and the Organization of the Petroleum Exporting Countries (OPEC) worked together to raise oil prices.
Who Exxon can appoint to its board of directors is also restricted by the approval of the FTC.
Closing the Deal
With a few exceptions, Pioneer employees and directors cannot be appointed or nominated by the company for the next five years.
Just one day after the FTC approved the acquisition, the deal was officially closed. It combined Exxon’s 570,000 net acres with Pioneer’s 850,000 acres of commercial property in the Midland basin.
Permian Basin Expansion
ExxonMobil’s current operations in the massive Permian shale basin, the US’s highest-producing oil field, are expected to be significantly expanded by the merger.
According to the Federal Reserve Bank of Dallas, the Permian basin currently produces approximately 40% of all oil produced in the United States. It still has the potential to significantly expand as a producer, despite the fact that it already contains more than 7,000 oil fields.
Important Strategic Decision
According to data collection platform Statista, Exxon, which is the third-largest oil and gas company in the world in terms of revenue, made an important strategic decision to acquire a larger portion of the basin.
The rewards are already being reaped by the company. The oil and gas giant reported $9.24 billion in profits in the second quarter of this year, compared to $7.88 billion in profits in the second quarter of 2023.
Increased Profits
This profit report for the second quarter of 2024 is one of the largest profits it has made in a decade.
The major acquisition and new production from oil fields in both the Permian basin and Guyana were cited by the company and analysts as the reasons for the increase in profits.
Global Performance
In terms of global performance Exxon is still trailing behind two Chinese-owned organizations, Sinopec and PetroChina.
In comparison with Europe Exxon is slightly ahead of major competitors such as the UK’s Shell and France’s TotalEnergies.
As members of Pioneer consider their next move it remains to be seen how many more layoffs the company will announce.
