Fossils Announce Flurry of Job Cuts as Low Demand Continues
The last few days have brought a flurry of job reductions across a slumping fossil industry and beyond, with Royal Dutch Shell, TC Energy, and oil refiner Marathon Petroleum all announcing layoffs.
Shell is planning to cut 7,000 to 9,000 jobs by the end of 2022, including hundreds in Canada, in a bid to save US$2 to $2.5 billion, the company revealed Wednesday. “We have to be a simpler, more streamlined, more competitive organization that is more nimble and able to respond to customers,“ said CEO Ben van Beurden. “To be more nimble, we have to remove a certain amount of organizational complexity.”
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The company’s stock market value hit a 25-year low Thursday, “demonstrating the scale of the challenge the biggest oil companies face convincing investors about their green ambitions,” Bloomberg writes.
Shell “has 3,500 workers in Canada, accounting for about 4.2% of its global work force of about 83,000 employees,” The Canadian Press reports, citing Shell Canada spokesperson Tara Lemay. Although precise details are still taking shape, “if the cuts are made proportionately, they would result in between 294 and 378 fewer jobs in Canada.”
While Shell scaled back its presence in the Alberta tar sands/oil sands when it sold off most of its holdings to Canadian Natural Resources Ltd. in 2017, the news agency notes that the British/Dutch colossal fossil is also the lead partner in the consortium behind the C$40-billion LNG Canada megaproject in British Columbia. Shell also owns about 1,300 gas stations in Canada, along with conventional oil and gas operations, petrochemical plants, and two refineries.
On Tuesday, TC Energy, the Calgary-based pipeliner previously known as TransCanada Corporation, announced it was laying off line workers and managers in its natural gas division, just days after CEO Russ Girling surprised the market by announcing his retirement. TC didn’t say how many jobs would be lost, “but said in an e-mail its Canadian gas operations and projects team is being restructured,” the Globe and Mail writes. “The move is the latest in a series of job and capital expenditure cuts in the energy sector as companies try to protect their bottom lines.”
The Globe cites the Canadian Association of Petroleum Producers reporting more than 28,000 production jobs lost since the beginning of the year, while the Canadian Association of Oilwell Drilling Contractors says its members have cut their staff by 20 to 50%.
Then on Thursday, Findlay, Ohio-based Marathon Petroleum, the United States’ biggest independent oil refiner, announced about 2,050 job cuts, in a bid to adjust to slumping gasoline demand “that’s showing no sign of recovering to pre-pandemic levels,” Bloomberg states. The layoffs, combined with empty positions that Marathon will not be filling, add up to about 12% of its work force.
“The move reflects the hit taken by the global refining industry, which has been left with a capacity glut as consumers work from home and airlines operate at a fraction of their former flight schedule,” the news agency writes.” With COVID-19 cases increasing in some parts of the U.S. and Western Europe, it’s unclear how or when consumption might improve in the months ahead.”