Exxon Mobil Corp., the largest energy company in the United States, plans to cut jobs in Texas as it integrates Pioneer Natural Resources Co. and its land holdings into its business, months after closing its acquisition of the once-rival.
The greater Houston-based company offered more than 1,500 Pioneer workers roles, and the 59 job cuts come from employees declining the offers or working in transitional roles no longer needed by Exxon, a company executive said in a filing this week with the Texas Workforce Commission.
The energy company's nearly $60 billion acquisition of Pioneer Natural Resources closed in May after it was announced by the companies last October.
The all-stock deal was expected to double Exxon's Permian Basin land holdings and give the energy giant the ability to trim about $2 billion in costs, executives said in unveiling the merger. At the time of the announcement, Pioneer had roughly 2,000 office and field employees working in Texas, including its more than 1.1 million-square-foot headquarters at 777 Hidden Ridge Drive in Irving, about 14 miles northeast of downtown Dallas.
"As a result of the recent merger between Pioneer Natural Resources Co. and Exxon Mobil Corp., Pioneer will engage in layoffs," Jared Young, Exxon's public and government affairs manager, said in a letter to the Texas Workforce Commission, adding the layoffs will be permanent.
"Our employment strategy has not changed — the success of this merger depends heavily on the retention of Pioneer's talented workforce, and more than 1,500 Pioneer employees were offered jobs as part of the merger," he said. Exxon did not respond to a media request from CoStar News.
In all, Exxon plans to cut 59 jobs, with 39 of those employees located at Pioneer's Irving campus. The remainder of the job cuts are in West Texas at locations in Midland and Big Lake. The cuts are expected to go into effect Sept. 30.
This comes as Exxon and other oil producers are responding to a drop in oil demand. This month, Exxon Chief Financial Officer Kathy Mikells said during an earnings call the executive team is making progress on its goal of saving $15 billion between 2019 and 2027.
"Whether it's getting more efficient on logistics or getting more efficient because we're standardizing now between ourselves and Pioneer, standardizing all the materials and things that we're buying, those are things that will continue to drive savings," Mikells told Wall Street analysts.
The Pioneer acquisition was Exxon's biggest such deal in two decades. Pioneer's assets delivered a record performance during the second quarter, executives said, adding the companies have been sharing best practices throughout the integration.