ExxonMobil Reorganizing to Cut Costs and Create Global Business Hub
By ExxonMobil (XOM) is reorganizing its business units in order to reduce costs and trim some jobs.[0] This reorganization is part of the company’s multiyear effort to save $9 billion in annual costs by 2023 compared to 2019 levels. The new organization will bring together crude, natural gas, power, and petroleum product desks and form a global business hub to manage finance, procurement, and customer service.[1]
The new division will focus on “driving commercial intensity and ultimately delivering industry-leading trading results,” according to an email sent to employees.[2] Specific details such as hiring targets, capital commitments, and the extent of job cuts have not been disclosed.[2]
ExxonMobil is one of the world’s largest energy companies, and its reorganization plan could have a big impact on the energy market. The company has the advantage of a huge balance sheet and physical assets, which could give it an edge over even the top trading houses, who have seen record profits since the pandemic.[3]
However, ExxonMobil has a history of wading in and out of trading over the past five years, and market observers are skeptical about the company’s current plans. Investors were cautiously optimistic about the plans on Thursday, with the stock up 0.4% on the day.
ExxonMobil’s planned reorganization is part of a continuing effort to reduce costs and increase profits.[4] The company is on track to meet its target of $9 billion in cost reductions by 2023-end and posted a record net income of $55.7 billion in 2022.[5] Investors are watching ExxonMobil’s moves closely, and the reorganization could have a big impact on the energy market.
0. “ExxonMobil combining business units as it continues to cut costs” Greater Baton Rouge Business Report, 9 Feb. 2023, https://www.businessreport.com/business/exxonmobil-combining-business-units-as-it-continues-to-cut-costs
1. “Exxon to create new trading division for global energy – report (NYSE:XOM)” Seeking Alpha, 9 Feb. 2023, https://seekingalpha.com/news/3934333-exxon-to-create-new-trading-division-for-global-energy-report
2. “Exxon to launch new Global Trading division in bid to boost profits” Quantum Commodity Intelligence, 9 Feb. 2023, https://www.qcintel.com/article/exxon-to-launch-new-global-trading-division-in-bid-to-boost-profits-11670.html
3. “Exxon’s Trading Ambitions Mean Culture Shift to More Risk-Taking” Yahoo! Voices, 11 Feb. 2023, https://www.yahoo.com/now/exxon-trading-ambitions-mean-culture-145338867.html
4. “Exxon (NYSE:XOM) to Create Trading Unit to Compete with Rivals” TipRanks, 10 Feb. 2023, https://www.tipranks.com/news/exxon-nysexom-to-create-trading-unit-to-compete-with-rivals
5. “Why ExxonMobil Stock Topped the Market on Thursday” The Motley Fool, 9 Feb. 2023, https://www.fool.com/investing/2023/02/09/why-exxon-mobil-stock-topped-the-market-on-thursda/
