U.S. oil and gas sector cuts jobs as production rises

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U.S. oil and gas sector jobs

Highlights

U.S. oil and gas extraction employment drops to 114,500 in July, lowest since the pandemic, despite crude output rising 4% to 13.8 million barrels per day.
ExxonMobil and Chevron report $26.5 billion in Q2 profit as cost cuts, technology advances, and large layoffs at ConocoPhillips, Chevron, and BP reshape sector employment.
Wood Mackenzie forecasts global upstream investment to fall to $512 billion in 2026, down from $527 billion, with U.S. investment edging down to $124 billion from $127 billion.

Employment decline despite output growth

As reported by Financial Times, citing the U.S. Bureau of Labor Statistics, employment in oil and gas extraction falls to 114,500 in July, the lowest level since the height of the Covid-19 pandemic, while oilfield services jobs decline by about 7,500 to 264,600 since January 2025.

That contraction comes even as crude production rises by about 4% to 13.8 million barrels a day since Donald Trump’s inauguration. Natural gas production is also forecast to reach a record average of 122.5 billion cubic feet per day this year.

The mismatch between stronger output and weaker hiring adds to a mixed picture for an administration that promises to revive fossil fuels employment through deregulation and expanded drilling. Oil production and corporate profits are climbing sharply, helped in part by higher petrol and diesel prices linked to the Iran war.

The drilling upswing is generating major profits for producers and refiners. ExxonMobil and Chevron together post $26.5 billion in second-quarter profit, reinforcing political scrutiny of the sector’s gains.

Cost cuts and technology reshape hiring

Companies are still carrying out workforce reductions announced last year, when concerns about a global supply glut raised the possibility of crude falling to $50 a barrel. ConocoPhillips, Chevron and BP outline plans to reduce their workforces by up to 25%, 20% and 5% respectively, while Chevron and ConocoPhillips are integrating large acquisitions and BP is pursuing a wider restructuring under chief executive Meg O’Neill.

The focus on leaner staffing extends a longer-term industry shift that follows the 2014-16 shale crash, when producers began prioritising investor returns over expansion. Advances in drilling technology, automation and artificial intelligence are helping companies raise output with fewer workers, and some engineering roles are also being outsourced to technology centres in India.

Kevin Book of ClearView Energy Partners says the industry has achieved major efficiency gains over the past 15 years, with less than half the workforce now needed to produce the same volume of oil and gas as at the start of the shale boom. Over that period, Exxon’s global workforce falls by about 24,000 to 58,000, while Chevron’s drops by about 19,500 to 43,000.

The American Petroleum Institute says the sector is going through workforce adjustments as technology and productivity gains change operational needs, while growth areas such as liquefied natural gas still support jobs. Even so, there are few indications that companies are lifting spending or hiring in 2026, with Wood Mackenzie forecasting global upstream investment at $512 billion, down from $527 billion last year, and U.S. investment edging down to $124 billion from $127 billion.

Analysts say uncertainty around conflicts involving Iran and Russia-Ukraine, along with Washington’s tariff disputes with Canada and other countries, is keeping executives cautious. Michael Alfaro of Gallo Partners says persistent policy shifts are leaving management teams reluctant to commit new spending.

In our earlier article on U.S. labor projections, we looked at BLS forecasts showing that automation and AI are expected to drive steep job declines in a range of routine occupations through 2035. It also highlighted that, while overall job growth is set to slow, healthcare and social assistance are projected to account for a large share of new jobs due to demographic-driven demand.

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