ConocoPhillips has announced sweeping job cuts that will see its global workforce reduced by between 20% and 25%, a move that immediately rattled investors and sent the oil giant’s stock sharply lower.
The layoffs, estimated to affect 2,600 to 3,250 employees and contractors, are part of a restructuring plan the company has dubbed “Competitive Edge.”
The initiative is aimed at driving down costs and improving efficiency amid mounting pressure from volatile crude prices and rising production expenses.
Rising Costs, Falling Prices
The decision follows a turbulent year for the energy sector. Global oil prices have slipped by more than 12% in recent months, while ConocoPhillips has struggled with climbing operating costs, which rose from $11 per barrel in 2021 to $13 per barrel in 2024.
The company is also digesting its high-profile acquisition of Marathon Oil, which closed earlier this year.
“Today’s announcement is a difficult but necessary step to safeguard the company’s long-term competitiveness,” a ConocoPhillips spokesperson said. “We are committed to supporting employees through this transition while building a leaner, more resilient organization.”
Market Reaction
The news sparked an immediate selloff in ConocoPhillips shares, which fell between 3.9% and 4.7%, closing in the low $90s.
The decline outpaced the broader S&P 500 Energy Index, which lost around 2% on the day. The stock is now down nearly 4% year-to-date and has shed more than 13% over the past 12 months.
Analysts say the job cuts, while significant, may not fully reassure investors. “This is a bold move that shows management is serious about cost discipline, but the scale of layoffs raises questions about operational stability,” said an energy sector analyst at RBC Capital Markets.
What’s Next
The bulk of the layoffs will be completed by the end of 2025, with the restructuring expected to be fully implemented in 2026.
ConocoPhillips plans to unveil a new organizational structure later this month, with further details on regional impacts expected in the coming weeks.
Despite the market jitters, some analysts argue the cuts could ultimately strengthen the company’s position. “In the long run, shedding costs and improving efficiency could make ConocoPhillips more competitive in a lower-price environment,” noted Jefferies in a client briefing.
For now, however, the oil major faces a delicate balancing act — reassuring investors while navigating one of the largest workforce reductions in its history.
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