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Exxon Mobil CEO Warns of Unspecified Job Cuts

Exxon Mobil's CEO warned of unspecified job cuts and stressed the continued importance of fossil fuels.
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Exxon Mobil  (XOM) - Get Exxon Mobil Corporation Report Chairman and Chief Executive Darren Woods warned employees that the oil industry giant would be laying off workers as the company struggles through the coronavirus pandemic.

Shares of the Irving, Texas, company were up slightly to $33.25.

"These are difficult times," Woods said in a memo. "We are making tough decisions, some of which will result in friends and colleagues leaving the company."

The pandemic shutdown has hit the oil industry hard, sparking mergers and bankruptcies.

Woods noted that oil demand dropped about 20% to 78 million barrels a day in April from 101 million barrels a day in December.

Global automobile production dropped 60% in April, Woods added, while commercial airplane flights were down 70% during the same time period.

The CEO said Exxon Mobil has exceeded its targeted reductions in spending that it committed to in March, deferring more than $10 billion in capital and cutting 15% of cash operating expenses.

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"I wish I could say we were finished, but we are not," he said. "We still have some significant headwinds, more work to do and, unfortunately, further reductions are necessary." 

Bloomberg reported in June that the company was getting ready to cut jobs in the U.S.

Woods also stressed the continued importance of fossil fuels. He said that oil and gas currently make up about 60% of the global energy mix.

By 2040, he said, "despite increasing investments in renewables and concerns with emissions, oil and gas are still projected to make up about 50% of the global energy mix."

"So, while society will move towards lower-carbon sources of energy as technology improves, oil and gas will continue to play an important role in the long-term energy mix," Woods said.

Earlier this month, Bloomberg reported that Exxon Mobil planned to increase its yearly carbon-dioxide emissions 17% by 2025.  

Much of the rest of the corporate -- and non-corporate -- world is trying to curb carbon emissions, including Exxon’s competitors, such as BP  (BP) - Get BP p.l.c. Report and Royal Dutch Shell  (RDS.A) .  

"We often talk of companies having a higher purpose," Woods said. "Well, I can think of no higher purpose than helping people and communities around the world grow in prosperity and achieve their aspirations for a better life through affordable energy."