ConocoPhillips CEO Reportedly Says M&A Focus Hurt Competitiveness, Leading To Jobs Cuts – ‘I Fault Myself’
Synopsis
CEO Ryan Lance said he faults himself for not paying attention, adding that the company should have been smarter about how it approached its acquisitions.
ConocoPhillips (COP) Chief Executive Ryan Lance reportedly told employees on Thursday that the decision to lay off as much as 25% of the workforce stemmed in part from the company losing competitiveness as it focused on acquiring smaller rivals.
ConocoPhillips’ stock fell more than 3.5% in Friday afternoon trading, extending its weekly decline to about 6.7% on the layoff announcement. However, retail sentiment on Stocktwits around the oil and gas producer moved higher within the ‘bullish’ zone over the past week.
"The cost and the whole competitiveness of the company probably took a backseat to those initiatives and those things we were doing for very real reasons, important reasons for the company," Lance said in a recording of the town hall, cited by Reuters. The report stated that the town hall meeting took place a day after the company announced the layoffs, which are part of a broader restructuring aimed at reducing costs.
"I fault myself for not paying attention and keeping the other things sort of centered and important," added Lance. "We probably backslid a little bit in the cost effort... maybe we should have been smarter about how we did it." Last year, the company bought Marathon Oil for $22.5 billion. In 2021, ConocoPhillips acquired Concho Resources for $9.7 billion and bought Permian assets from oil major Shell (SHEL) for $9.5 billion.
The energy industry has undergone the largest consolidation in a generation over the past two years, according to EY. Other oil companies have also been laying off employees to save costs. Earlier this year, in February, Chevron (CVX) announced that it would be reducing its workforce by 15% to 20% by 2026. Last year, Shell laid off around 20% of its workforce.
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