Layoffs are not the answer to the situation OXY is in. OXY has 7.38 B in operating cash which can be used to pay salaries, G&A costs while digging out of the hole. We are stretched thin enough as it is and more people who took VSP are leaving soon. They should not be replaced. OXY needs to realign groups and how some capitol is being spent ie useless automation, stop trying to save money by automating, etc. Return on Assets need to be improved greatly as well as increasing profit margins. Laying off people will hardly make a dent in the huge debt. Might make some investors temporarily happy and shoot stock up by $3.00 but that’s not the way to do it. And a big jump in oil prices, reduce in supply sure would help a lot.
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I think Vicki is doing a great job.
I agree with Oscar.Brown.Destroyed.OPC about the deadweight directors. They do not add any value. Some have no clue of what leadership is. They only know whose a– to kiss and that's all. They should be cut loose first before any frontline workers.
OXY has a lot of overpaid, deadweight "Director" types (not BOD, just "directors"). They need to go. Should have been cut loose in 2014, but they are too well-connected. Examples? How about any of the employees who have time to participate in that stupid "Yammer"? And the gal who sponsors the "Pink Petro" organization? We also have a couple of shiny young gals who to "university outreach" (for hiring). – Well, since OXY is not going to be hiring at $21 WTI, these folks serve NO PURPOSE. And oh, there is a legacy APC "director of diversity" – one with no direct reports. "All in", a director-level costs the company at least $300k. For WHAT?
How exactly do these people contribute to "the bottom line"? Answer: they DON'T! They are just part of Vicki's "woke" culture. These are some EASY cuts to make. They should never have been hired.
To “Them” they are the answer.....
Warren Buffet will get every cent left of his 10 billion investment and leave everyone with absolutely nothing. It’s just business with Warren Buffet, not personal.
Mass layoffs are always an answer. They may not be the best answer but they are right behind capex cuts. Management sure as hell is not going to cut their own salaries or lay themselves off.
Oxy wasn't well hedged for this. The hedges take back on price risk once they got below $45. And oil is breaking $30 at this moment, probably marching to the teens in short order. They only hedged for minimal price movements in order to improve upside exposure. mo–ns! The good news though, they can liquidate the hedge and raise cash. The hedge likely has no further upside at this point.
On the lay off front, think about it. They just cut the capex budget, and probably will cut it more in short order. What is the half of resources that's responsible for deploying capital in new drills going to do? Oxy will be doing mostly surveillance for the next year or two, no reason to keep paying people to watch Netflix, Youtube and get coffee downstairs all day.
Believe me you need to get that COC sooner than later.
Yes OXY is hedged, it’s a pretty good one, but for how long it lasts and how low oil goes. Just pray hard. Having been in the business, my experience unhedged oil cos fare a lot worse during downturns. Some oil cos don’t believe in hedging and I’ve never understood why!
Hopefully OXY is hedged effectively! You would think after taking on an incredible amount of debt (Anadarko) they would have covered the downside effectively. We will see...
That’s awful ! NO way to do layoffs. Petrotechs certainly are not expensive compared to several useless IT and Management positions. Those on the Board should take salary reductions.
Thank god for the COC!
We better hope to get laid off before Icahn gets control. I read an article about him moving his company from New York to Florida. He offered everyone a job in Florida with and move package, but the ones who could not move received nothing. He did say he would not contest their unemployment claim which was basically 11k for six months. No extended insurance or anything. If he gets control we will probably be walked out with a lot less.
Au contraire, OP. Mass layoffs are ALWAYS (part of) the answer. We don't have any control over oil prices (revenue), but we DO have control over expenses. Capex cuts and G&A cuts are what oil companies do in times like these. When a CEO asks their VP's "What costs can we cut ?", the HR VP always chimes in with "Let's cut all those expensive Petrotechs !". Everyone then nods approvingly, and they order steak and lobster to be delivered for lunch - ok, I made up that last part (they only ordered steak).
"And a big jump in oil prices, reduce in supply sure would help a lot."
Guess it doesn't hurt to dream but boy, is that closing comment out of touch with reality. PAIN is coming and will far exceed the ability of most to endure. Oxy will not exist by Fall of 2021.