Released September 05, 2025 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--ConocoPhillips (Houston, Texas) became the latest large oil company to announce it would be cutting jobs this week when it confirmed a Wall Street Journal report that it would cut up to 25% of its workforce of about 13,000 people. Use of contractors also will be reduced. Most of the staff cuts are expected to take place this year.
ConocoPhillips joins other major oil companies, including Exxon Mobil Corporation (Spring, Texas), BP Plc (London, England), Shell Plc (London, England) and Chevron Corporation (Houston, Texas) in rejiggering their operations amid low oil prices, falling profits, soft demand and the growing use of artificial intelligence (AI) to perform analytic tasks. Depending on the company, the changes include staff and contractor cuts, asset sales and other strategic efforts to remain competitive in a difficult market.
A ConocoPhillips spokesman told the Journal, "We are always looking at how we can be more efficient with the resources we have." Oil companies are trying to respond to various strategic challenges in the industry, including low crude oil prices, tepid demand growth, declining profitability, an over-supplied global oil market, uncertainty over President Donald Trump's tariff regime, investors' demanding a larger slice of free cash flow and technology that is able to automate many functions currently performed by technicians, engineers and other staff.
Rivals have been trimming their costs for years. Exxon has cut its "structural costs" by about $13.5 billion since 2019. Shell and BP are similarly engaged in strategic cost cutting and asset sales. Earlier this year, Chevron said it will cut about 20% of its staff and move about 6,000 jobs to India, where labor costs are lower.
Cost cutting and labor shifting announcements come as oil companies reported generally lower second-quarter profits, with the exception of Shell. For more on that, see August 11, 2025, article - Earnings Slide at Three Big Oil Companies, With Shell an Exception.
And then there's the impact of AI, which many industry observers say will fundamentally alter the process, and cost, of finding, extracting and refining crude oil.
Trump has proclaimed this to be the "golden age of fossil fuels," and that the U.S. needs to do more to monetize "the liquid gold under our feet." U.S. crude oil production already is at a record levels of about 13.4 million barrels per day (BBL/d). Prior to the start of the second Trump presidency, industry observers said the incoming president wanted to increase that by about 3 million BBL/d, but no official target was ever issued by the president.
In the face of slow demand growth and increased production from nations in the Organization of the Petroleum Exporting Countries, increasing supply would tend to exert downward pressure on prices and profitability.
West Texas Intermediate (WTI), the U.S. crude oil benchmark, has slid more than $12 per barrel since the start of the Trump administration, to a current price of around $64 per barrel. Industry analysts have said that WTI at current prices is below the break-even point for many companies and in many unconventional formations.
Added to these challenges are questions about whether production can grow in certain unconventional formations, such as the Permian Basin. Currently, oil production in the Permian is about 6.2 million BBL/d, nearly triple what it was in 2017, when hydraulic fracturing started to unlock once-uneconomic deposits of oil and gas.
The Trump administration has launched several efforts to boost the oil and gas industry, including reversing vehicle mileage efficiency and vehicle tailpipe emissions standards enacted by his predecessor. Trump also is seeking to open more federal acreage for drillers. Congress clawed back federal tax credits for the purchase or lease of an electric vehicle in this summer's "One Big Beautiful" tax and budget bill.
The president's hefty tariffs on imported steel and aluminum have driven up costs and squeezed profitability, further whipsawing producers.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
ConocoPhillips joins other major oil companies, including Exxon Mobil Corporation (Spring, Texas), BP Plc (London, England), Shell Plc (London, England) and Chevron Corporation (Houston, Texas) in rejiggering their operations amid low oil prices, falling profits, soft demand and the growing use of artificial intelligence (AI) to perform analytic tasks. Depending on the company, the changes include staff and contractor cuts, asset sales and other strategic efforts to remain competitive in a difficult market.
A ConocoPhillips spokesman told the Journal, "We are always looking at how we can be more efficient with the resources we have." Oil companies are trying to respond to various strategic challenges in the industry, including low crude oil prices, tepid demand growth, declining profitability, an over-supplied global oil market, uncertainty over President Donald Trump's tariff regime, investors' demanding a larger slice of free cash flow and technology that is able to automate many functions currently performed by technicians, engineers and other staff.
Rivals have been trimming their costs for years. Exxon has cut its "structural costs" by about $13.5 billion since 2019. Shell and BP are similarly engaged in strategic cost cutting and asset sales. Earlier this year, Chevron said it will cut about 20% of its staff and move about 6,000 jobs to India, where labor costs are lower.
Cost cutting and labor shifting announcements come as oil companies reported generally lower second-quarter profits, with the exception of Shell. For more on that, see August 11, 2025, article - Earnings Slide at Three Big Oil Companies, With Shell an Exception.
And then there's the impact of AI, which many industry observers say will fundamentally alter the process, and cost, of finding, extracting and refining crude oil.
Trump has proclaimed this to be the "golden age of fossil fuels," and that the U.S. needs to do more to monetize "the liquid gold under our feet." U.S. crude oil production already is at a record levels of about 13.4 million barrels per day (BBL/d). Prior to the start of the second Trump presidency, industry observers said the incoming president wanted to increase that by about 3 million BBL/d, but no official target was ever issued by the president.
In the face of slow demand growth and increased production from nations in the Organization of the Petroleum Exporting Countries, increasing supply would tend to exert downward pressure on prices and profitability.
West Texas Intermediate (WTI), the U.S. crude oil benchmark, has slid more than $12 per barrel since the start of the Trump administration, to a current price of around $64 per barrel. Industry analysts have said that WTI at current prices is below the break-even point for many companies and in many unconventional formations.
Added to these challenges are questions about whether production can grow in certain unconventional formations, such as the Permian Basin. Currently, oil production in the Permian is about 6.2 million BBL/d, nearly triple what it was in 2017, when hydraulic fracturing started to unlock once-uneconomic deposits of oil and gas.
The Trump administration has launched several efforts to boost the oil and gas industry, including reversing vehicle mileage efficiency and vehicle tailpipe emissions standards enacted by his predecessor. Trump also is seeking to open more federal acreage for drillers. Congress clawed back federal tax credits for the purchase or lease of an electric vehicle in this summer's "One Big Beautiful" tax and budget bill.
The president's hefty tariffs on imported steel and aluminum have driven up costs and squeezed profitability, further whipsawing producers.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
