Colossal fossil ExxonMobil announced last week that it is laying off 14,000 people, or about 15% of its global work force, as the COVID-19 pandemic continues laying waste to global fossil fuel demand and driving down oil prices.
The cuts will include “deep white collar staff reductions” in Exxon’s operations in the United States, Reuters reports. “The figure will include losses from restructurings, retirements, and performance-based exits” for both staff and contract employees.
While Exxon blamed the pandemic for what it called its “ongoing efficiency work” [by which we’re sure they don’t mean energy efficiency—Ed.], the company “has struggled in recent years to regain footing after misplaced bets on shale gas and Russia exploration,” and “lost nearly US$1.7 billion in the first six months of the year.” On Friday, Exxon announced a $680-million loss for the third quarter, a more modest drubbing than some analysts expected, but still “significantly worse than those of its four peers, Shell, Total, BP, and Chevron,” the Institute for Energy Economics and Financial Analysis states. “These disappointing results challenge the company’s repeated claims that the fundamentals of the oil and gas industry have not changed.”
IEEFA says Exxon closed out the third quarter with less cash in hand than the other colossal fossils, and insufficient funds to cover its promised dividends to shareholders. “ExxonMobil also announced it would not raise its dividend for the first time in nearly 40 years.”
And yet, IEEFA notes that the company is still holding onto its wild faith in its own business model—which emphasizes continued oil and gas exploration, in spite of a mounting climate emergency, on the belief that a growing global middle class will drive up demand for fossil fuels. Exxon insists those market fundamentals haven’t changed after seeing its share value fall from $100 in 2014 to $30 today, its invested capital from a onetime high of $527 billion to less than $150 billion.
“The population will continue to grow. Economies will continue to grow,” Exxon insists, and the “winner will be the company with the strongest portfolio and the company with the strongest operating results.”
“ExxonMobil needs a business model that manages decline, generates stable profits, and contributes to a solution to the world’s climate and energy challenges,” replied IEEFA Director of Finance Tom Sanzillo. “The constant refrain that ‘industry fundamentals are solid’ is just wrong.”