ConocoPhillips to cut 1,800 jobs as oil slump takes toll

As oil prices have plunged by more than half since last year's high, energy companies around the world have laid off more than 120,000 workers.
As oil prices have plunged by more than half since last year's high, energy companies around the world have laid off more than 120,000 workers.PHOTO: AFP

HOUSTON (Bloomberg) - ConocoPhillips, the fourth-largest US oil company, plans to cut its workforce by 10 per cent in the latest sign that the energy industry is preparing for a longer downturn.

Most of the 1,800 jobs being lost will come from North America, including more than 500 from Houston, Daren Beaudo, a spokesman for the Houston-based oil and gas producer, said in an e-mailed message Tuesday (Sept 1).

"Our industry is undergoing a dramatic downturn, which has caused us to look at our future workforce needs," he said.

As oil prices have plunged by more than half since last year's high, energy companies around the world have laid off more than 120,000 workers and reduced spending by more than US$114 billion. The scope of ConocoPhillips job cuts was first reported by the Houston Chronicle.

ConocoPhillips's cuts follow earlier reductions at explorers and service companies. Chevron Corp. said in July it was eliminating 1,500 jobs as part of its efforts to reduce spending by US$1 billion. Calgary-based Penn West Petroleum Ltd. said Tuesday it plans to cut 400 positions, or 35 per cent of its workforce.

Many of the cuts have been concentrated in the ranks of oil and gas service companies, those that are focused on drilling or contracting rigs and equipment for producers, such as Halliburton Co. or Saipem SpA. Oil companies have also begun to put off spending on high-cost projects to hoard cash in the slump, canceling or delaying US$200 billion since mid-2014, according to consulting firm Wood Mackenzie Ltd.

ConocoPhillips shares fell 2.9 per cent Tuesday in New York trading, and are down 31 per cent this year.