This downturn is truly like no other … and a big opportunity for repositioning So, what does all of this mean for the future of the OG&C industry? Some might argue that this is what cyclicality looks like, and the industry and employment will both pick up as oil prices recover. 7Įmployment cyclicality and downturn are also having a knock-on effect on a few fast-growing specialty chemicals businesses that compete with relatively stable businesses (such as pharmaceuticals) in sourcing talent in the growing material informatics and advanced materials sciences space. 6 Existing OG&C employees having fungible digital skills are at the risk of migrating to other industries (e.g., technology and consulting firms, digital solution providers, etc.) where the prospects of career growth seem to be brighter. 5 Such large-scale layoffs, coupled with the heightening cyclicality in employment, are challenging the industry’s reputation as a reliable employer.Īlthough attracting new talent may not be an immediate priority-and understandably so given the slowdown in production and the pressure to reduce costs-retaining top employees and tackling the challenge of an aging workforce (median age of above 44 years) are of utmost concern for the industry. 4 Even the relatively stable sectors, such as refining and chemicals, reported up to 35,000 layoffs combined. The employment situation took a turn for the worse due to COVID-led slowdown of the economy and the resulting oil price crash, leading to the fastest layoffs in the industry-about 107,000 workers were laid off between March and August 2020, apart from widespread furloughs and pay cuts. During 2014–2019, the sensitivity of OG&C employment to oil prices was at its highest, especially in upstream and oilfield services (OFS) sectors (see sidebar, “About 70% of jobs lost in 2020 may not come back by the end of 2021 in a business-as-usual scenario”). 3 Additionally, the short-cycled nature of shales made hiring extremely cyclical. 2 From July 2014 to June 2016, the industry laid off 200,000 people (figure 1).
But problems started appearing in 2014 when the boom triggered a collapse in oil prices to US$50/bbl, and the talent narrative shifted to mass layoffs. Then came the shale boom a decade ago and the industry ramped up its hiring. Explore the Oil, gas & chemicals collection
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