The job cuts are the latest sign of pain in the oil and gas industry, which is facing higher costs and lower revenues as prices hover around $63 a barrel. Many companies say they cannot drill profitably if oil prices fall under $65 a barrel.
Oil giants Chevron and SLB announced their own layoffs earlier this year.
Houston-based ConocoPhillips hired management consulting firm Boston Consulting Group to advise on the restructuring and layoff program, which is being referred to internally as “Competitive Edge,” two sources told Reuters.
The sources declined to be named as the discussions were confidential.
ConocoPhillips has started by restructuring its operations and announced it would centralize some functions, two sources added.
The company previously had six operating segments: Alaska; Lower 48; Canada; Europe, Middle East and North Africa; Asia Pacific; and Other International, according to its annual report.
The operations restructuring will be followed by reorganizations in corporate and support functions, one source added.
“We are always looking at how we can be more efficient with the resources we have. As part of this process, we have informed employees that workforce reductions are anticipated,” a ConocoPhillips spokesperson said in a statement.
Details of the layoffs have not been announced but are expected in the fourth quarter of this year, four sources said. The company has not determined how large the cuts will be, three sources added.
The company had about 11,800 employees in 14 countries at the end of 2024, according to its annual report.
ConocoPhillips has bulked up in recent years through hefty acquisitions. Besides its acquisition of Marathon Oil last year, it bolstered its position in the Permian Basin of Texas and New Mexico with a $10 billion deal to buy Shell’s assets and its acquisition of Concho Resources in 2021.
The company laid off up to 500 Houston employees in 2020 as the COVID-19 pandemic slashed global energy demand and pushed energy prices down. Marathon Oil had also laid off more than 500 workers in Texas, ahead of its merger with ConocoPhillips.
ConocoPhillips is also focused on divesting some of its assets, one of the sources said. The company was exploring the sale of oil and gas assets in Oklahoma that it inherited from its $22.5 billion takeover of Marathon Oil last year, Reuters reported earlier this month.
(Reporting by Sheila Dang and Ernest Scheyder in Houston; Editing by Liz Hampton and Lisa Shumaker)
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