The US oil industry is seeing another round of job cuts even as it is producing at record highs. ConocoPhillips announced this week that it would cut 25 percent of its global work force, or as many as 3,250 jobs, by the end of the year. Chevron earlier this year announced that it would eliminate nearly 9,000 employees. Together the cuts indicate the difficulties for giant oil companies as they cope with weak prices and higher costs, the New York Times reported.
Mergers followed by layoffs
ConocoPhillips acted less than a year after finishing its $17 billion acquisition of Marathon Oil. Consolidation has run rampant in the industry over the past few years as large players acquired smaller ones to expand drilling operations. Layoffs invariably follow in their footsteps, as firms eliminate duplicate positions and reduce operations. ConocoPhillips, which employs around 13,000 workers and contractors, stated the reductions are aimed at improving efficiency and lessening costs.
Oil prices tell the story
Despite policy changes in the Trump years that have granted oil companies regulatory benefits, including faster permitting and softer emissions standards, those pluses haven't yet measurably boosted bottom lines. Instead, the short-term driver of job reductions is the price of oil. US crude has remained around $64 a barrel for most of 2025, from an average of $77 per barrel in 2024. At this price, companies are breaking even drilling new wells but far below the prices that fuelled fat profits in the recent past.
Profit pressure across the sector
ConocoPhillips said its second-quarter earnings dropped 15 percent from the same period last year, to $2 billion. Other majors have similarly reported lower earnings as reduced oil prices nibble at margins. Chevron, the No. 2 US oil company, reported earlier this year that it would cut its workforce by as much as 20 percent. While some small producers have also announced less extensive cuts, the trend highlights the industry-wide dilemma of matching high production with softer market prices.
Mixed impact on jobs overall
Despite headline cutbacks in major corporations, the oil and gas sector overall still has not felt the precipitous decline in employment. Data show that oil and gas services companies had 2 percent fewer workers in June than they did a year earlier, yet pipeline construction employment has actually increased. However, the overall trend is for a shrinking workforce even as US production trends toward all-time highs, suggesting an industry that is increasingly putting greater and greater priorities on efficiency and automation rather than raw manpower.
Market reaction and outlook
The cuts spooked investors, with shares of ConocoPhillips falling more than 4 percent Wednesday, ahead of declines in the rest of the energy sector. Analysts attribute the cuts to a longer-term reorientation of the US oil industry, which is designed to make the industry profitable at a time when prices will not return to recent highs. The restructuring will only intensify as companies move to operate leaner while still being capable of supplying both domestically and internationally.
The job cutting at Chevron and ConocoPhillips shows that even the oil giants are subject to price volatility and market stress. Austerity and consolidation do improve the industry's efficiency, but only at the expense of lower employment, even as new records are reached in US oil output. The message to employees is clear: America's energy giants are restructuring for a world where profits are attached to efficiency, rather than head count.
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