Behind the $60 Billion Deal: ExxonMobil Slashes Jobs After Acquisition

America’s leading gas and oil producer, ExxonMobil, has issued layoffs as part of a workforce restructuring in the wake of a $60 billion acquisition deal.

Layoff Filing in Texas

Layoffs are imminent at ExxonMobil, according to a recent filing with the Texas Workforce Commission, on behalf of the Texas-based oil and gas company.

Pioneer Natural Resources Acquisition

The layoffs come in the wake of a major acquisition, which has required a degree of workforce restructuring. In May, Exxon acquired Pioneer Natural Resources, another Texas company specializing in hydrocarbon exploration in a $60 billion deal.

59 Laid Off

Late last month a Worker Adjustment and Retraining Notification confirmed that Exxon will lay off 59 Pioneer employees at the end of September. 

Most in Las Colinas

39 of these employees are workers in Las Colinas, a community development in Irving, Texas, where the Pioneer headquarters is based. 

Other Locations

18 employees currently work in three different locations in Midland, including the Midland downtown office. Two more employees are based in Big Lake.

Chance to Transition

Those who have received layoff notices have been offered transition roles with Exxon, with some declining to join the company, according to a company statement. So far the company has not confirmed how many will take new positions and how many will leave.

2000-Strong Pioneer Workforce 

Prior to the acquisition, Pioneer had a workforce of 2,200. Since the May merger, more than 1,500 employees have been offered positions with Exxon. 

Success Depends on Pioneer’s Workforce

“Our employment strategy has not changed,” said Exxon’s public and government affairs manager Jared Woods in a letter to the state Workforce Commission. “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.”

Largest Deal in 25 Years

The $60 billion merger was the company’s largest deal in a quarter-century since it acquired Mobil in 1999 for $81 billion.

FTC Approval, With Some Caveats

The Federal Trade Commission agreed to approve the deal on the grounds that ExxonMobil agreed to bar Scott Sheffield, Pioneer’s founder, from joining the company’s board of directors or acting as an advisor. 

Allegations of Collusion

Sheffield, who became the company’s founding CEO in 1997, officially resigned in late 2023. Earlier this year the FTC alleged that Sheffield had colluded with The Organization of the Petroleum Exporting Countries (OPEC) to inflate oil prices.

Restrictions on Board Nominees

The FTC’s approval also placed restrictions on who Exxon can appoint to its board of directors. For the next five years, the company cannot nominate or appoint any Pioneer employee or director, with some exceptions.

One Day After Approval

The deal was formally closed just one day after the FTC approved the acquisition.

Combining Property

It combined 850,000 acres of Pioneer’s commercial property in the Midland basin with Exxon’s pre-existing 570,000 net acres. 

Huge Expansion in the Permian Basin

The merger is expected to significantly expand upon ExxonMobil’s current operations in the Permian basin, a huge shale basin that is the highest-producing oil field in the US. 

7000 Oil Fields

The Permian basin currently accounts for approximately 40% of US oil production, according to the Federal Reserve Bank of Dallas. Despite already containing more than 7,000 oil fields, it still has the potential for significant growth as a producer.

Pertinent Strategy

Obtaining a larger share of the basin was an important strategic decision for Exxon, which is the third-largest oil and gas company in the world based on revenue, according to data gathering platform Statista.

Significant Profit Boost

And it has already paid off. Earlier this month the oil and gas giant reported one of the largest second-quarter profits it has generated in a decade, earning $9.24 billion compared to $7.88 billion in the second quarter of 2023.

Acquisition and New Production

The company and analysts attributed the profit surge to the major acquisition, as well as new production from oil fields in both the Permian basin and Guyana.

A Corporate Force

It trails behind two Chinese-owned companies, Sinopec and PetroChina, and runs just ahead of the UK’s Shell and France’s TotalEnergies. 

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