ConocoPhillips to shed 10pc of global workforce

OREANDA-NEWS. September 14, 2015. ConocoPhillips will shed 10pc of its global workforce amid a worsening business environment following the plunge in crude prices.

"Our industry is undergoing a dramatic downturn, which has caused us to look at our future workforce needs," the company said. "As we have assessed the implications of lower prices on our business, we've made the difficult decision that workforce reductions will be necessary."

The largest percentage of reductions will happen in North America. Of its total current staff of 3,753 in Houston, more than 500 jobs are expected to be eliminated. The company, with a total pre-reduction workforce of 18,100, didn't give a breakdown of cuts by each business unit. It will share more details on the cuts in "the next several weeks," it said.

The world's biggest independent oil and gas producer is facing the first major test of its 2012 move to spin off the refining business and focus purely on oil exploration and production. A fall in crude prices since 2014 is forcing most independent producers to report losses while refiners post robust income as their main feedstock costs fall. Majors like ExxonMobil who have presence in both segments are able to offset low upstream income with higher refining profits.

So far oilfield services companies such as Schlumberger, Halliburton and Baker Hughes have been at the forefront of job cuts, with producers largely holding on to their workforce on grounds that it is difficult to quickly fill the void when markets turn. But a steep fall in prices to six-and-a-half year lows last month may force oil companies to reconsider their plans and hunker down further to weather the storm.

ConocoPhillips in July announced a cut to its 2015 capital expenditure (capex), to \\$11bn from \\$11.5bn, which was itself a 30pc reduction of the \\$16bn it previoulsy planned to spend in 2015. It also said it may sell more assets that are not core to its operations.