HOUSTON, Texas (Covering Katy News) – Houston-based energy giant ConocoPhillips has announced it will cut 20% to 25% of its global workforce as part of a broad restructuring effort, a move that could significantly impact the greater Houston area's employment landscape.
The cuts were confirmed by Reuters and the Houston Business Journal on Wednesday after CEO Ryan Lance detailed the plans in a video message to employees.
Katy Impact
More than 30,000 Katy-area residents commute to Houston's Energy Corridor for work, according to 2022 Texas Workforce Commission data. The Energy Corridor, spanning over 2,000 acres, serves as a major business district housing numerous energy companies and Fortune 500 corporations.
Katy's proximity to corporate energy training centers like the BP North America Center and PetroSkills has established the area as a hub for energy sector talent, drawing skilled workers from around the world. This strategic location has made Katy a key residential base for Houston's energy workforce, with thousands of residents contributing to the region's dominant energy industry.
Houston Region Impact
With ConocoPhillips ranking as the 16th largest energy employer in the Houston area with 2,700 local employees, the layoffs represent a substantial blow to the region's energy workforce. While the company has not broken down job cuts by region, the Houston area's significant employee base suggests hundreds of local positions are at risk.
"I know these changes create uncertainty, and they are unsettling," Lance reportedly said in the video message heard by Reuters employees.
The company's global workforce totals approximately 13,000 employees and contractors, meaning between 2,600 and 3,250 positions will be eliminated worldwide. Most of the reductions will reportedly take place by the end of this year.
Driving Forces Behind the Cuts
The layoffs are part of ConocoPhillips' aggressive cost-cutting strategy aimed at reducing expenses by $1 billion and improving margins by the end of 2026. Lance cited rising operational costs as a key factor, noting that controllable costs had increased to $13 per barrel in 2024 from $11 in 2021.
"As we streamline our organization and take work out of the system, we will need fewer roles," Lance explained in the video message.
A fall in oil prices has put pressure on ConocoPhillips and its industry peers throughout 2025, forcing widespread staff reductions across the sector. Major competitor Chevron announced plans to lay off up to 20% of its staff in February, while other energy companies including SLB and BP are also reducing their workforces.
Marathon Oil Integration Impact
The job cuts build upon previous workforce reductions following ConocoPhillips' $22.5 billion acquisition of Houston-based Marathon Oil Corp. last year. Before that deal closed in November, Marathon had warned that more than 500 Houston employees would face layoffs. In April, ConocoPhillips indicated even more positions would be eliminated beyond the initial Marathon-related cuts.
The Marathon acquisition initially was expected to generate $500 million in synergies, but ConocoPhillips doubled that expectation to $1 billion less than a month before the deal closed. The company has now completed the integration of Marathon Oil's assets.
Company Performance
Despite the workforce reductions, ConocoPhillips remains a major player in the energy sector. The company ranks fifth on the Houston Business Journal's 2025 Largest Houston-Area Public Companies List, based on 2024 revenue of $56.91 billion. In the second quarter of 2025, ConocoPhillips earned $14.74 billion in revenue, representing a 4% increase from the same quarter last year.
The restructuring reflects the company's focus on maintaining competitiveness in a challenging market environment while positioning for long-term profitability. About 80% of the anticipated cost reductions will come from general and administrative expenses, lease-operating expenses, and travel and entertainment costs.
Broader Industry Context
The ConocoPhillips layoffs are part of a wider trend affecting Houston's energy sector, as companies across the industry grapple with volatile oil prices and pressure to improve operational efficiency. As the energy capital of the world, Houston continues to feel the impact of these industry-wide adjustments as major employers streamline their operations.