(Wall Street Journal) -- Competition for engineering and geologist jobs in the
oil-and-gas sector was already fierce -- and that was before President Trump's
tariff blitz sparked fears about a global recession that sent oil prices
tumbling.
Chevron, BP and other oil companies are offshoring more specialized
white-collar positions and related work to lower-cost labor pools in countries
such as India, while cutting thousands of jobs elsewhere.
The shift, alongside a string of mergers and cost-cutting, has thinned the
companies' ranks of skilled U.S. workers. It has also disrupted the industry's
pecking order, which for decades has been topped by specialized engineers
whose positions were more insulated during oil busts.
Chevron said in February that it would cut as many as roughly 8,000 jobs, or
20% of its global workforce, by the end of next year. That decision has
prompted angst at its global headquarters in Houston, where many of its
higher-paid skilled workers are based.
The same day, the oil behemoth said it was "changing how and where work is
performed" and would expand the use of global centers, such as one in India
where it aims to add about 600 jobs by the end of this year. About half of
Chevron's nearly 40,000 employees are in the U.S.
That decision reflects a growing pool of skilled workers in India who are
willing to do the same jobs for a fraction of the cost, along with advances in
technology that enable remote working. Engineers there have long drawn
salaries around a third or a fourth the size of their counterparts in the
U.S., though pay is climbing thanks to rising demand for talent.
"India seems a lot less distant," said Nicholas Bloom, an economist at
Stanford University who has advised companies on work setups and remote work.
"Many managers have told me comments like, 'Our remote operations are
typically 90% as efficient, but 70% of the cost, so it's a great deal for us.'
"
The new positions aren't only traditional back-office jobs that U.S. companies
have offshored for years. Chevron intends to hire engineers, geologists and
environmental scientists in India as part of a $1 billion investment to
develop an engineering and innovation hub near Bellandur, a suburb of
Bengaluru, a spokesman said.
Hiring for skilled posts in the U.S., meanwhile, has slowed to a pace
typically associated with an oil downturn, recruiters say. The slowdown is
creating gaps in the résumés of experienced oil workers, forcing some to take
pay cuts in new roles and dissuading recent college graduates from joining the
industry.
Amanda Rico, a career adviser in Houston with Rico Editorial Services, said
workers with advanced degrees are competing more fiercely for fewer jobs.
Across the U.S., the number of oil-and-gas jobs has dropped almost 15% since
mid-2019 to about 123,000, according to the Bureau of Labor Statistics.
Connor Cabaniss, a senior petroleum engineering student at the University of
Texas, said he and some of his classmates have expanded their job searches
across the oil-and-gas value chain because postelection uncertainty has led
many oil-and-gas companies to slow their hiring.
Cabaniss, who is graduating in May, has had multiple interviews, but isn't
receiving as many calls in recent months. He is hopeful the cyclical business
will turn around soon.
"Even postelection, they still really don't know what the market's going to be
like," Cabaniss said.
Since Trump launched his tariff blitz in early April, U.S. oil prices have
tumbled 12% to near $63 a barrel, a level that is expected to prompt some
soul-searching in the industry. If prices remain near those levels for long,
frackers will have to re-evaluate their spending levels.
Although Chevron and the other major oil companies are more cushioned than the
smaller competitors, they are still likely to face pressure to curb or
recalibrate their investments in long-term projects.
Like Chevron, Exxon Mobil has also been expanding in India, with a tech hub
that helps oversee work related to its Guyana project and other assets. Exxon
has also invested in technology centers in China, Malaysia and Qatar. At the
end of last year, its global head count was down about 19% since the start of
the Covid-19 pandemic, according to regulatory filings.
European oil giants Shell, BP and TotalEnergies were early entrants to the job
market in India, where they made investments in lubricants, gas and renewable
energy. Together, they employ more than 21,000 in the country. BP recently
said it plans to cut 4,700 jobs elsewhere.
The competition for engineers in India is so fierce that the oil companies are
struggling to hire workers quickly and are known for luring experienced
candidates from their rivals with higher pay.
Beyond its skilled workforce, India is an attractive growth market: Its
natural-gas consumption is set to grow almost 60% by 2030, according to the
International Energy Agency. Trump recently touted a deal for India to buy
more American fossil fuels after a White House meeting with Prime Minister
Narendra Modi.
The timing of the hiring slowdown in the U.S. is somewhat ironic because
Trump's trade war is meant to restore jobs and manufacturing. The president's
friends in the oil patch had expected his rollback of regulations to spur job
growth in the sector.
"Typically, that would have been a boom for the U.S.," said Debbie Milks,
chief operating officer of recruiting firm Brookwoods Group. "We're not seeing
that at all."
oil-and-gas sector was already fierce -- and that was before President Trump's
tariff blitz sparked fears about a global recession that sent oil prices
tumbling.
Chevron, BP and other oil companies are offshoring more specialized
white-collar positions and related work to lower-cost labor pools in countries
such as India, while cutting thousands of jobs elsewhere.
The shift, alongside a string of mergers and cost-cutting, has thinned the
companies' ranks of skilled U.S. workers. It has also disrupted the industry's
pecking order, which for decades has been topped by specialized engineers
whose positions were more insulated during oil busts.
Chevron said in February that it would cut as many as roughly 8,000 jobs, or
20% of its global workforce, by the end of next year. That decision has
prompted angst at its global headquarters in Houston, where many of its
higher-paid skilled workers are based.
The same day, the oil behemoth said it was "changing how and where work is
performed" and would expand the use of global centers, such as one in India
where it aims to add about 600 jobs by the end of this year. About half of
Chevron's nearly 40,000 employees are in the U.S.
That decision reflects a growing pool of skilled workers in India who are
willing to do the same jobs for a fraction of the cost, along with advances in
technology that enable remote working. Engineers there have long drawn
salaries around a third or a fourth the size of their counterparts in the
U.S., though pay is climbing thanks to rising demand for talent.
"India seems a lot less distant," said Nicholas Bloom, an economist at
Stanford University who has advised companies on work setups and remote work.
"Many managers have told me comments like, 'Our remote operations are
typically 90% as efficient, but 70% of the cost, so it's a great deal for us.'
"
The new positions aren't only traditional back-office jobs that U.S. companies
have offshored for years. Chevron intends to hire engineers, geologists and
environmental scientists in India as part of a $1 billion investment to
develop an engineering and innovation hub near Bellandur, a suburb of
Bengaluru, a spokesman said.
Hiring for skilled posts in the U.S., meanwhile, has slowed to a pace
typically associated with an oil downturn, recruiters say. The slowdown is
creating gaps in the résumés of experienced oil workers, forcing some to take
pay cuts in new roles and dissuading recent college graduates from joining the
industry.
Amanda Rico, a career adviser in Houston with Rico Editorial Services, said
workers with advanced degrees are competing more fiercely for fewer jobs.
Across the U.S., the number of oil-and-gas jobs has dropped almost 15% since
mid-2019 to about 123,000, according to the Bureau of Labor Statistics.
Connor Cabaniss, a senior petroleum engineering student at the University of
Texas, said he and some of his classmates have expanded their job searches
across the oil-and-gas value chain because postelection uncertainty has led
many oil-and-gas companies to slow their hiring.
Cabaniss, who is graduating in May, has had multiple interviews, but isn't
receiving as many calls in recent months. He is hopeful the cyclical business
will turn around soon.
"Even postelection, they still really don't know what the market's going to be
like," Cabaniss said.
Since Trump launched his tariff blitz in early April, U.S. oil prices have
tumbled 12% to near $63 a barrel, a level that is expected to prompt some
soul-searching in the industry. If prices remain near those levels for long,
frackers will have to re-evaluate their spending levels.
Although Chevron and the other major oil companies are more cushioned than the
smaller competitors, they are still likely to face pressure to curb or
recalibrate their investments in long-term projects.
Like Chevron, Exxon Mobil has also been expanding in India, with a tech hub
that helps oversee work related to its Guyana project and other assets. Exxon
has also invested in technology centers in China, Malaysia and Qatar. At the
end of last year, its global head count was down about 19% since the start of
the Covid-19 pandemic, according to regulatory filings.
European oil giants Shell, BP and TotalEnergies were early entrants to the job
market in India, where they made investments in lubricants, gas and renewable
energy. Together, they employ more than 21,000 in the country. BP recently
said it plans to cut 4,700 jobs elsewhere.
The competition for engineers in India is so fierce that the oil companies are
struggling to hire workers quickly and are known for luring experienced
candidates from their rivals with higher pay.
Beyond its skilled workforce, India is an attractive growth market: Its
natural-gas consumption is set to grow almost 60% by 2030, according to the
International Energy Agency. Trump recently touted a deal for India to buy
more American fossil fuels after a White House meeting with Prime Minister
Narendra Modi.
The timing of the hiring slowdown in the U.S. is somewhat ironic because
Trump's trade war is meant to restore jobs and manufacturing. The president's
friends in the oil patch had expected his rollback of regulations to spur job
growth in the sector.
"Typically, that would have been a boom for the U.S.," said Debbie Milks,
chief operating officer of recruiting firm Brookwoods Group. "We're not seeing
that at all."
