Several major U.S. energy companies are implementing significant workforce reductions, despite a supportive policy environment from the Trump administration aimed at boosting oil and gas production. This trend follows substantial expansion in U.S. oil and gas output and is occurring amid a wave of industry-altering "mega-mergers." Companies such as Chevron, Exxon, ConocoPhillips, and Occidental have been actively acquiring smaller firms since 2023 to bolster their domestic and international production capabilities.
However, the current economic climate, marked by declining oil prices, has compelled these giants to resort to large-scale layoffs as a cost-saving measure. ConocoPhillips, for instance, announced in September 2025 its intention to reduce its global workforce by up to 25%, impacting approximately 3,250 employees. This decision follows its $17 billion acquisition of Marathon Oil, a deal valued at $22.5 billion including net debt, which closed in November 2024. The acquisition was expected to yield at least $500 million in cost and capital savings within the first year.
Chevron, the second-largest U.S. oil company, also revealed plans earlier in 2025 to decrease its workforce by up to 20% by 2026, potentially affecting as many as 9,000 employees. This follows earlier layoffs, including 800 employees in the Permian Basin in May and 600 in California. Chevron's operations were also impacted by the revocation of its oil production license in Venezuela. However, the company recently secured a favorable arbitration ruling against Exxon Mobil concerning Hess Corp.'s offshore oil assets in Guyana, clearing the path for its $53 billion acquisition of Hess.
Other significant industry players, including Halliburton and the oilfield services firm SLB, have also announced workforce reductions this year. A Reuters analysis of second-quarter financial results revealed that 22 publicly traded U.S. producers, excluding Exxon and Chevron, collectively reduced their capital expenditures by $2 billion due to falling oil prices. The broader market dynamics are being shaped by OPEC+'s efforts to regain market share. Following a period of strict production quotas, the alliance announced an increase in production by 137,000 barrels per day starting in October. This move has already contributed to an approximate 12% drop in international oil prices this year, pushing them just above the breakeven point for many U.S. oil companies.
The number of active drilling rigs in the U.S. has seen a notable decrease, falling by approximately 69 units this year to stand at 414, according to Baker Hughes. This reflects a strategic shift within the industry, moving from aggressive drilling to a more cautious approach. Many U.S. producers are now awaiting higher oil prices, specifically between $70 and $75 per barrel, to resume significant drilling operations. In essence, the decision by many large U.S. oil and gas companies to curtail spending, following a post-pandemic era characterized by mega-mergers and substantial investments, has resulted in widespread job reductions. With OPEC+ signaling increased production, the downward pressure on oil prices is likely to persist, leading to sustained low profit margins for numerous U.S. firms and a continuation of cautious spending strategies in the foreseeable future.