A month ago, Exxon denied a report that it was considering layoffs as a way to ensure shareholders got their dividends. But it seems that the company may have not been entirely truthful.
Business Insider received a leaked email to employees saying that “we continue to see prolonged negative market impacts that require us to make further changes so we are best positioned to take advantage of market improvements when they occur.” The document later adds: “As part of our commitment to transparency, we want to make it clear that these studies will include evaluation of appropriate staffing levels. We recognise these efforts bring uncertainty and anxiety.”
While the email doesn’t reportedly set a timeline for when layoffs could occur or where, it appears the company is planning for contraction into 2021 and could target cutting jobs in the U.S. and outsourcing them overseas where labour is cheaper.
The pandemic has led demand for oil to dip, and at least some Exxon’s competitors don’t really see it returning. In late April, Shell’s CFO said the coronavirus had led to “major demand destruction that we don’t even know will come back.” While that may have been a bit dramatic with oil use clawing slowly back from the biggest demand drop in history, the price of oil still remains low and demand is expected to stay below the high water mark it hit in 2019.
All that could have Exxon looking to curtail its operations, adding to the rough spell the company has gone through. The past month or so alone, the company has declared its biggest losses on record, reported that could see 20% of its reserves become unproven assets due to low prices, and ended a historic run on the Down Jones. These are all clear signs of distress. To me, it would be best to cut the dividend payout to shareholders and find ways to support workers as much as possible during a time of economic uncertainty. But then this is probably why I’m not a CEO.
All that said, it does point to a reality we’ve raised here at Earther time and again: that we are entering a very dangerous period for people working in the fossil fuel industry. The pandemic is accelerating trends that were already afoot as the world finally starts to turn away from oil and gas. Some companies like Exxon are trying to preserve the good times as long as possible, some like Shell are trying to become nebulous “energy companies,” and smaller firms are going belly up. But regardless, the future of a world that relies a lot less on fossil fuels — and eventually not at all on them — is coming, and that means a dangerous transition for fossil fuel workers.
In the U.S. alone, the industry shed a staggering 118,000 jobs from March to July. That’s a small-sized city of people out of work, but the effects of those layoffs ripple out into the communities that have sprung up around oil jobs. Exxon could add to that total.
With companies leaving workers hung out to dry, the need to focus on a just transition to the 21st century has never been clearer. While the Trump administration has been truly blind to this, funelling money to fossil fuel companies and deregulating the industry in an attempt to keep it afloat, the Democratic presidential nominee and former Vice President Joe Biden’s plan also some holes in it. Biden reiterated on Monday that he wouldn’t ban fracking, and he along with congressional Democrats have failed to put forward a plan to end fossil fuels and care for workers affected by that fallout.
Is it politically expedient? Sure. But the reality is, a just transition is perhaps the most important plan politicians need to be working on right now. The pandemic is making the injustice of job losses a reality with even massive companies like Exxon turning layoffs. Putting off having real, adult conversations about what comes after oil will only make the coming, even steeper decline driven by the climate crisis that much harder.