ExxonMobil Suffers Huge Losses, Job Cuts

Photo: Wikimedia CC

By Amy Lupica, ODP Contributing Writer

ExxonMobil ended its third quarter with a net loss of $680 million, compared to a $3.2 billion profit at the same time last year. The loss may prove to be the industry’s largest write-down in over a decade. Exxon has been increasingly lagging behind other major industry players including Chevron, BP, and Shell, despite CEO Darren Woods’s decision to cut spending for 2020 by over a third to make up for projected losses. Analysts note that the decline is most likely tied to Exxon’s failed bets on oil and gas, and its failure to invest in renewable energy opportunities.

Why This Matters: It is hard to fathom how far the oil giant has fallen — and how fast.  ExxonMobil in 2013 was the largest company in the world, but it failed to modernize like its competitors.  For example, BP recently pledged to reach zero emissions by 2050. ExxonMobil, on the other hand, doubled down on fossil fuels in 2009 with a $41 billion acquisition of XTO Energy, a move Axios called “spectacularly ill-timed.” Exxon fumbled again in 2017, this time with a massive fracking expansion in Texas’ Permian Basin that came to a grinding halt as the COVID-19 outbreak decimated demand for natural gas.  Since 1980, Exxon’s global workforce has plummeted from 390,000 employees to less than 70,000. The real question is which of the other oil majors will meet the same fate.

The Downward Spiral

Because of its lack of foresight and a refusal to change with the times, Exxon now faces a rapid hurtle toward rock bottom. Now, Exxon isn’t even in the top 40 most valuable companies. It’s lost 54% of its total value this year alone. Axios reported that Exxon is now worth less than renewable energy pioneers like NextEra energy and electric car manufacturer Tesla. Exxon isn’t the only oil company plummeting in value; Chevron is now down 42%. Meanwhile, NextEra, the world’s largest solar and wind power generator, found itself up 23%.  ExxonMobile announced this week it will be laying off 15% of its global workforce amid a pandemic, with plans to cut 1,900 jobs in the U.S., mostly in Houston where Exxon’s headquarters is located. 3.7 million Texans have applied for unemployment relief since mid-March, and the state saw major surges in unemployment as recently as September. 

Oil Stains Don’t Come Out Easy

Exxon, and many oil companies like it, may be seeing their empire crumble, but their environmental legacy won’t fade anytime soon. Exxon’s most famous failure, the 1989 Exxon Valdez oil spill, irreparably damaged ecosystems in the Gulf of Alaska. The region’s orca population hasn’t recovered; due to high PCBs in the water, deposited by oil-cleanup chemicals, one group of whales known as “Chugach transients” hasn’t produced a surviving calf since 1984. By conservative estimates, 21,000 gallons of oil remained in the gulf as of 2014.

Additionally, communities of color won’t soon forget the suffering Exxon caused them. Residents in low-income and predominantly Black communities where Exxon operated refineries were subjected to fumes that caused “intense sudden headache, tearing eyes, a runny nose, and congestion that made it difficult to sleep and lasted into the next day.” Fumes released from refineries caused increased instances of cancer in these neighborhoods as well as “respiratory, neurological, cardiac, and other serious health problems.” Physicians have even found a connection between the chemicals emitted by some Exxon refineries and hair loss. One Exxon refinery in Texas was frequently in violation of the Clean Air Act, but when residents of the surrounding area sent a letter to the EPA in 2000, it took 17 years to receive a predictably unsatisfactory response.

The Trump Administration’s rollbacks have made it even harder for communities to petition the EPA for investigations. Mustafa Ali, one of the founding members of the environmental justice office at the EPA, explained, “There have never been enough resources in those spaces,” he said. “What’s new is that now there’s actually a strategic plan to dismantle the basic protections that have been in place for years on both the civil rights and environmental side.”

However, the collapse of Exxon offers a shining light for environmentalists. Felix Salmon, the chief financial correspondent at Axios, believes that Exxon won’t be the last of the oil giants to fall in the near future as a result of climate change, quoting the hit Broadway show Hamilton, “Oceans rise, empires fall.”

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