U.S. oil and gas supermajor ExxonMobil expects up to $200 million in charges related to job cuts in 2021, figured in previously in the company’s cost-savings plans.
ExxonMobil said in a securities filing on Wednesday that the company would get hit with $200 million in charges regarding job cuts. This means that the company will spend more money this year as workers exit than in 2020.
Also, the supermajor will see total cash outflows between $400 million and $600 million, versus $47 million in 2020. According to ExxonMobil, it set aside some money last year toward the costs. The severance cost estimate does not include job cuts related to changes in the company’s portfolio.
Reductions should be “substantially complete” by year-end, including voluntary and involuntary exits and the use of fewer contractors. In the first quarter, the company had before-tax charges of $39 million mostly from employee separation costs in Singapore and Europe.
The company has already announced its intentions to reduce staffing levels at its Singapore affiliate with about 300 positions expected to be impacted by the end of 2021. This is 7 per cent of the company’s more than 4,000 employees in Singapore.
According to ExxonMobil’s filing, before-tax workforce reduction savings from its global staffing, including employees and contractors, are estimated to range between $1 billion and $2 billion per year after program completion when compared to 2019 levels.
