ConocoPhillips (COP.N) is preparing layoffs as part of a major restructuring, the latest U.S. oil giant to tighten operations amid 63/barrelcrudeprices∗∗andintegrationcostsfromits∗∗63/barrelcrudeprices∗∗andintegrationcostsfromits∗∗23 billion Marathon Oil buyout. Dubbed “Competitive Edge,” the program—backed by Boston Consulting Group—aims to streamline the expanded company but risks further destabilizing an industry already reeling from Chevron and SLB job cuts.
Restructuring Details
- Phase 1: Consolidate six global operating segments (Alaska, Lower 48, Canada, EMEA, Asia Pacific, Other International) into a centralized model.
- Phase 2: Overhaul corporate/support functions in Q4 2024, with layoffs expected but scale still undetermined.
- Asset Sales: Evaluating divestments, including Oklahoma oil/gas fields acquired via Marathon.
Why Now?
- Marathon Integration: The May 2024 deal added 2B barrels of reserves but duplicated roles.
- Margin Pressure: At 63/bblWTI∗∗,manyshaleplaysare∗∗unprofitable∗∗;Conoco’sbreak−evenis∗∗ 63/bblWTI∗∗,manyshaleplaysare∗∗unprofitable∗∗;Conoco’sbreak−evenis∗∗ 65/bbl.
- Industry Trend: Chevron cut 1,500 jobs post-Hess deal; SLB shed 9,000 in Q1.
Human Toll
- 2024 Headcount: 11,800 employees across 14 countries.
- Precedent: Conoco laid off 500 Houston staff in 2020; Marathon cut 500+ pre-merger.
Broader Context
- Acquisition Spree: Since 2020, Conoco spent $55B+ on Shell’s Permian assets, Concho Resources, and Marathon.
- Investor Priorities: Shareholders demand capital discipline over growth, forcing efficiency drives.
What’s Next?
- Q4 Clarity: Layoff specifics expected by late 2024.
- Permian Focus: Merged Marathon assets could make Conoco the #2 Permian producer behind Exxon.
- Price Sensitivity: If oil dips below $60/bbl, more cuts loom across the sector.
ConocoPhillips Launches Restructuring with Layoffs After $23B Marathon Oil Deal