ExxonMobil is preparing deep spending and job cuts, according to people familiar with the matter, as it fights to preserve a 8% shareholder dividend with a multibillion-dollar quarterly loss looming, Reuters reports.
It was unclear how extensive the cuts will be. The largest U.S. oil company slashed this year’s budget by 30% in April, but Chief Executive Darren Woods’s turnaround through rebounding demand and increased asset sales have not panned out and losses are climbing.
On Friday, ExxonMobil is expected to report a $2.63 billion second-quarter loss, according to Refinitiv Eikon data, on sharply lower prices and weaker production, the first back-to-back quarterly losses in at least 36 years. Shares are down 35% so far this year as the coronavirus pandemic has crushed fuel demand.
The latest cost cuts are needed to preserve the company’s nearly $15 billion annual payout to shareholders in the face of rising losses, the people said. ExxonMobil will not generate enough cash from production operations to cover this year’s dividend, analysts have said. It borrowed $18 billion earlier this year to bolster cash. Read the full story.