Layoffs at P66 in the Finance Group in Bartlesville today. No warning whatsoever. P66's CEO had indicated in an employee meeting In February there would likely be no layoffs as other cost cutting measures (e.g. reductions in travel, fewer new hires) would be sufficient. The rank and file are wondering what has happened which would result in a change of direction - why layoffs now?
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According to documents filed with the Security and Exchange Commission, the Board of Directors for Phillips 66 has recommended a $4.67 million compensation increase for Chairman/CEO Greg Garland, bringing his total compensation for fiscal year 2014 to $24.5 million, up from $19.8 million for 2013.
Clearly Garland will not be feeling any pain. I think that boost could easily cover the salaries of our co-workers who are losing their jobs. It's all about Greed!
The crack spreads are actually what matter for refining, not the price of oil. They were way down in January, but came back up in February. As long as those stay strong, cash flow will be solid. The WTI/Brent spread is also very important. The midstream NGL business is getting hammered with the low prices. Transportation should be okay and chemicals will benefit from low priced feedstocks. Overall the company is in much better shape than the pure E&P plays, but to say low prices are good is a bit too simplistic. Garland is building a very diverse company with businesses that extend well beyond pure refining.
Also, just look around this board. Every single energy company is cutting salaries, bonuses and/or having layoffs. Nobody is getting off without some pain.
It makes no sense, the low oil prices is a good thing for the company. I don't undedstand this.
Why now? That is THE questions.