Energy supermajor ExxonMobil is preparing to reduce its U.S. offices headcount by up to 10 per cent annually for the next three to five years.
Bloomberg said on Monday, quoting people familiar with the matter, that ExxonMobil would be using its ‘ performance-evaluation system ’ to remove low performers.
According to the sources, the cuts will target the lowest-rated employees relative to peers, and for that reason will not be characterized as layoffs.
Such workers are usually put on a ‘ performance improvement plan ’ but it is believed that many would eventually leave on their own. This year’s evaluation is underway but affected employees have not yet been notified, the sources told Bloomberg.
ExxonMobil spokesman Casey Norton told the media outlet: “ Our annual performance assessment process has been occurring over the last several months. Where employees are not contributing to their highest ability, they may need to participate in an improvement plan. This is an annual process that has been in place for many years, and it is meant to improve performance. This process is unrelated to workforce reduction plans ”.
The plan is separate from ExxonMobil’s announcement last year that it will cut 14,000 jobs worldwide by 2022 , and it would extend reductions well beyond that original time frame.
It is worth noting that the performance-review process mostly applies to white-collar jobs in areas such as engineering, finance, and project management.
The company had 72,000 employees globally at the end of last year, of which 40 per cent worked in the U.S., according to a company filing.
Exxon’s other cost-cutting initiatives have included suspending bonuses and halting employee-contribution matches to 401k savings plans. Due to all these measures combined, ExxonMobil achieved $3 billion of annual ‘structural cost reductions’ in 2020.
This is not ExxonMobil’s finest hour as it is still reeling from losing three board seats to activist firm Engine No.1 – supported by one of Exxon’s largest shareholders, BlackRock.
On Monday, the company’s announced official results of its annual general meeting votes and conceded the removal of former Caterpillar CEO Douglas Oberhelman , former IBM CEO Samuel Palmisano , and the former CEO of Malaysia’s oil firm Petronas Wan Zulkiflee Wan Ariffin from the board over climate and financial concerns.
Offshore Energy has contacted ExxonMobil and their spokesperson to confirm and perhaps get some more details on the matter. We will update the article if and when we receive an answer.