Exxon Announces Plan to Merge Some Business Units in Cost-Cutting Move

Exxon Mobil Corp announced on Thursday that it is merging some of its business units in order to reduce annual costs by $9 billion between 2019 and 2023.

Exxon recently announced a restructuring of its top businesses and has now implemented changes to its second layer of management. All trading activities, ranging from oil to power and freights, have been combined into one global trading desk. This move is expected to streamline operations and create efficiencies within the company.

Shares in the company skyrocketed 1.5% after posting a record $56 billion net profit for 2022.

Last year, the oil company based in the United States announced plans to reorganize their operations into three distinct business units: Upstream, Low Carbon Solutions, and Product Solutions. The latter combined refining and chemical activities under one platform.

Exxon is consolidating operations by combining smaller units to centralize decision-making related to supply chain, procurement and the acquisition of raw materials. This move is intended to streamline processes and increase efficiency.

Exxon is looking to give itself more leverage in negotiations with third parties by closing the door on having multiple units engaging in separate deals with the same supplier.

"We want simpler processes and more modern tools that allow us to work more quickly and with less frustration, at lower cost," Exxon stated.

The organization has announced that they are downsizing their employee count, making the latest adjustment to their workforce "are not about headcount reductions." Exxon is engaging in major cost reduction efforts following a historic loss in 2020.