Lead: On Sept. 3 in Houston, ConocoPhillips announced a plan to reduce its global headcount by roughly 20–25%—about 2,600 to 3,250 roles—part of a wider restructuring as shares fell about 4.5% to $94.55.
Key Takeaways
- Company will cut 20–25% of its roughly 13,000 employees, affecting an estimated 2,600–3,250 positions.
- Most reductions are expected by year-end; reorganization to be completed by 2026.
- ConocoPhillips identified more than $1 billion in additional cost savings after earlier Marathon Oil synergies.
- CEO Ryan Lance cited rising controllable costs, now about $13 per barrel versus $11 in 2021.
- Shares fell ~4.5% on the announcement, reflecting pressure from lower oil prices this year.
- Management consulting firm Boston Consulting Group was reported to be advising on the program, internally called “Competitive Edge.”
Verified Facts
ConocoPhillips, the third-largest U.S. oil producer, said the workforce reduction will remove roughly one-fifth to one-quarter of roles from its current headcount of about 13,000 employees. Company spokespeople confirmed the 20–25% range and said most cuts will be executed before the end of 2025, with the full reorganization finished by 2026.
The company reported second-quarter net income of about $2 billion, its weakest quarterly profit since March 2021. Management attributes margin pressure to an increase in controllable costs—from $11 per barrel in 2021 to roughly $13 per barrel in 2024—and to weaker benchmark U.S. crude prices, which have fallen about 11% year to date amid higher OPEC+ output.
ConocoPhillips previously announced more than $1 billion in cost savings tied to its acquisition of Marathon Oil; leadership says it has now identified another $1 billion-plus of opportunities to trim expenses and improve margins. Sources familiar with internal plans say the company will disclose a new structure and management lineup in mid-September.
Context & Impact
The move follows similar cuts across the sector as energy firms respond to subdued oil prices and rising costs. Chevron announced layoffs of up to 20% earlier this year, while other players including SLB and BP have also pared staff and curtailed spending.
Analysts say the reductions aim to lower operating breakevens and preserve capital returns amid a tougher price environment. Short-term impacts may include reduced drilling activity, lower contractor demand, and regional variations in job losses depending on asset location.
- Market: Share reaction shows investor concern about near-term earnings and capital discipline.
- Operations: Early exits could slow project timelines and reduce in-field staffing.
- Supply chain: Service firms and suppliers may face lower orders if drilling and capex are curtailed further.
Official Statements
“I know these changes create uncertainty, and they are unsettling,”
Ryan Lance, CEO (video message)
“Most job reductions will be made by year-end; the new organization will be announced in mid-September,”
Company spokesperson (email)
Unconfirmed
- Exact regional and business-unit breakdown of the cuts has not been disclosed.
- Details on severance packages, rehiring windows, or relocation offers remain unreported.
- Specific names and timing of new management roles will be revealed in the mid-September announcement and are not yet confirmed.
Bottom Line
ConocoPhillips’ planned 20–25% workforce reduction underscores mounting pressure on oil majors from weaker crude prices and rising per-barrel costs. The cuts aim to protect margins and reposition the company for lower-price scenarios, but they carry near-term operational and market risks. Investors and industry stakeholders will watch the mid-September structural announcement and the town hall meeting scheduled for Thursday at 9 a.m. CT for more detail.