Layoffs loom at ConocoPhillips, with the energy giant announcing a 20-25% reduction in its workforce, sending share prices plummeting.

In a series of announcements, several major oil companies have revealed plans to cut their workforce and restructure their operations in response to falling oil prices.

BP, the British oil major, announced in January that it would cut over 7,000 staff, representing 5% of its workforce. The new structure and management details will be made public in mid-September.

Meanwhile, ConocoPhillips, another leading oil company, plans to reduce its workforce by 20-25%. Between 2,600 and 3,250 ConocoPhillips employees will be affected by the job cuts, with most of them being completed before the end of the year.

The company's CEO, Ryan Lance, detailed these plans in a morning video message. ConocoPhillips has also hired management consulting firm Boston Consulting Group to advise on the restructuring and layoff program.

ConocoPhillips has identified additional cost reduction and margin enhancement opportunities totaling over $1 billion. As a result, the company's controllable costs have risen to $13 per barrel in 2024 from $11 in 2021.

The reorganization will be completed by 2026. However, the company's net income for the second quarter shrank to about $2 billion, the lowest since the quarter ended March 2021. This decline is likely due to the rising costs, which have increased by about $2 per barrel.

Shares of ConocoPhillips declined 4.2% to $94.91 following the announcement. This contrasts with the broader S&P 500 Energy Index, which has risen by 5% so far this year, while the S&P 500 Energy Index dropped by 2.1% on the news.

Similarly, Chevron announced it would lay off up to 20% of its staff in February. Oil service giant SLB is also cutting its workforce in response to the falling oil prices.

These moves come as US crude futures have decreased by about 11% so far this year. The overall impact on the economy and employment remains to be seen, but it is clear that the oil and gas industry is undergoing significant changes in response to the current market conditions.