Energy company Phillips 66 said it is laying off 430 employees and contractors from its finance and procurement departments as part of a $1 billion cost-cutting campaign to bolster its bottom line.
The number of employee layoffs, meaning non-contractor positions, will be 175, or roughly 1% of Phillips 66's headcount. They are at offices, including business operations in Bartlesville, Oklahoma, and about 30 are to be laid off from the company's Houston office.
A Phillips 66 spokesperson said the layoffs are part of its “business transformation” effort to improve financial savings, will take place by the end of 2024 and didn't reveal the other offices affected or any potential effects on the company's property needs.
“The company announced changes to approximately 430 employee and contractor roles across its finance and procurement organizations in various global locations,” a Phillips 66 spokesperson said in an email to CoStar News. “Some employees will remain with the company as part of the new organization or in a new role, while some employees will be released after a transition period. Phillips 66 will also partner with outside companies to execute certain processes within these groups.”
Phillips 66 Chief Financial Officer Kevin Mitchell, during an earnings call on Aug. 2, said the company is in the process of implementing a $1 billion business transformation plan to cut $800 million in costs and $200 million in capital reductions.
“Over the first half of 2023, we realized $260 million in cost savings. The majority of these cost reductions relate to refining,” Mitchell said during the call. “Business transformation initiatives range from optimizing services across our portfolio of assets to establishing new tools to improve use of steam and energy.”
This week’s announcement follows a similar plan to trim operations at the end of last year. Phillips 66, during its Investor Day event in November 2022, said it would cut 1,100 jobs before the start of 2023.
Phillips 66 has about 13,000 employees, according to Forbes information published after the company’s layoffs. The company’s adjusted earnings for the second quarter of 2023 was $1.8 billion, down from $2 billion in the previous quarter.