Oil giant ConocoPhillips (NYSE: COP) announced Wednesday it will eliminate up to 25% of its global workforce before the end of 2025, affecting as many as 3,250 employees and contractors as the company grapples with rising costs and declining oil prices.
The Houston-based company, which employs roughly 13,000 people worldwide, said the cuts are part of a sweeping restructuring program called “Competitive Edge” developed with consulting firm Boston Consulting Group. Most layoffs will occur before year-end, the company said.
CEO Ryan Lance detailed the initiative in a video message to staff, citing production costs that have risen from $11 per barrel in 2021 to $13 per barrel currently, putting the company at a competitive disadvantage.
“As we streamline our organization and take work out of the system, we will need fewer roles,” Lance said in the video obtained by Reuters.
ConocoPhillips shares fell more than 4% following the announcement. The company said it has identified over $1 billion in cost and margin optimizations as part of the restructuring, which runs through 2026.
The layoffs follow ConocoPhillips’ $23 billion acquisition of Marathon Oil last year, as the company works to integrate operations and reduce overlap.
It appears Donald Trump’s “drill baby, drill” promise is clashing with policies that hurt oil companies.
Since Trump took office in January, crude oil prices have fallen more than 20% to below $65 per barrel — a level that makes drilling unprofitable for many companies. Oil executives surveyed by the Federal Reserve Bank of Dallas need prices around $64 per barrel to break even on new wells.
Industry executives, speaking anonymously in federal surveys, have sharply criticized Trump’s approach. “The threat of $50 oil prices by the administration has caused our firm to reduce its 2025 and 2026 capital expenditures,” one executive told the Dallas Fed in March. “‘Drill, baby, drill’ does not work with $50 per barrel oil.”
Another called the administration’s policies “chaos” and dismissed “drill, baby, drill” as “nothing short of a myth and populist rallying cry.”
Several Trump administration policies are squeezing oil companies. Steel tariffs have increased drilling costs just as companies look to expand operations. Baker Hughes estimates tariffs will cost it $100-200 million in earnings.
Trump’s repeated calls for OPEC to increase production have contributed to global oversupply, driving prices down further.
ConocoPhillips joins a growing list of energy companies announcing major cuts. BP confirmed a 5% workforce reduction in January, Chevron announced 20% cuts through 2026, oil services giant SLB also announced layoffs, and Houston-based APA cut nearly 300 employees.
Drilling activity has declined under Trump, with active rig counts down 4% in the first quarter compared to 2024. Texas, the nation’s top oil-producing state, saw rigs drop from 376 in March 2024 to 290 in March 2025.
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