ConocoPhillips says it will cut workforce by 20-25%, shares fall

U.S. oil and gas producer ConocoPhillips will cut 20-25% of its workforce, part of a broad restructuring program, a company spokesperson said on Wednesday after five sources told Reuters that CEO Ryan Lance detailed the plans in a video message earlier this morning.

Shares of the largest independent oil producer were down 3.9% to around $95.11.

"As we streamline our organization and take work out of the system, we will need fewer roles," Lance said in a video heard by Reuters, adding that rising costs were leaving the company behind its peers.

He said that controllable production costs were $2 per barrel above competitors. Costs had risen from $11 in 2021 to $13 in 2024.

ConocoPhillips has about 13,000 employees globally, meaning between 2,600 and 3,250 employees will be affected. Most of the cuts will be made before the end of the year, ConocoPhillips spokesperson Dennis Nuss said in an emailed response to Reuters.

The new structure and management will be made public in mid-September, and the reorganization will be completed by 2026, two of the sources said.

The company is set to hold a town hall meeting on Thursday morning at 9 a.m. Central Time, the sources said.

Oil major Chevron also announced layoffs earlier this year, as did service company SLB.

In April, two sources told Reuters that Houston-based ConocoPhillips had hired management consulting firm Boston Consulting Group to advise on the restructuring and layoff program, referred to internally as "Competitive Edge."

Last month, ConocoPhillips said it had identified more than $1 billion of additional cost reduction and margin enhancement opportunities, on top of the more than $1 billion in cost savings from its acquisition of Marathon Oil last year.

ConocoPhillips' net income shrank in the second quarter to about $2 billion, the lowest since the quarter ended March 2021, when COVID-19 had ravaged demand.