UK Markets close in 2 hrs 32 mins
  • FTSE 100

    6,407.96
    +23.23 (+0.36%)
     
  • FTSE 250

    19,748.52
    -96.29 (-0.49%)
     
  • AIM

    1,065.81
    +0.87 (+0.08%)
     
  • GBP/EUR

    1.1026
    -0.0092 (-0.82%)
     
  • GBP/USD

    1.3305
    -0.0118 (-0.8795%)
     
  • BTC-GBP

    14,388.51
    +236.15 (+1.67%)
     
  • CMC Crypto 200

    375.19
    -4.67 (-1.23%)
     
  • S&P 500

    3,662.45
    +40.82 (+1.13%)
     
  • DOW

    29,823.92
    +185.28 (+0.63%)
     
  • CRUDE OIL

    44.54
    -0.01 (-0.02%)
     
  • GOLD FUTURES

    1,817.20
    -1.70 (-0.09%)
     
  • NIKKEI 225

    26,800.98
    +13.44 (+0.05%)
     
  • HANG SENG

    26,532.58
    -35.10 (-0.13%)
     
  • DAX

    13,275.65
    -106.65 (-0.80%)
     
  • CAC 40

    5,551.51
    -30.13 (-0.54%)
     

Exxon halts contributions to employee retirement plan

Erwin Seba
·2-min read
FILE PHOTO: Logos of ExxonMobil are seen in its booth at Gastech, the world's biggest expo for the gas industry, in Chiba
FILE PHOTO: Logos of ExxonMobil are seen in its booth at Gastech, the world's biggest expo for the gas industry, in Chiba

By Erwin Seba

HOUSTON (Reuters) - Exxon Mobil Corp <XOM.N> is suspending the company's contribution to the U.S. employee retirement savings plan beginning in October, the company confirmed on Wednesday.

Employees blasted the decision by the largest U.S. oil company, which last week vowed to deepen cost cuts after posting back-to-back quarterly losses for the first time in its history.

It has already cut outlays on big projects by 30% and operating expenses by at least $1 billion (762.43 million pounds). A review of operations and staffing identified "significant potential" for additional savings, executives said last week.

"Given the current business environment, the corporation is taking steps to reduce costs," the company said in a message to employees seen by Reuters on Tuesday.

"The company intends to suspend the company match contribution to the U.S. Exxon Mobil Savings Plan for all employees covered by the Savings Plan, effective around Oct. 1, 2020."

Exxon spokeswoman Ashley Alemayehu said the suspension was part of the company's effort to reduce costs in response to the impact of the pandemic.

"There is potential for further reductions based on long-term structural efficiencies, reduced activity and an evaluation of workforce requirements," she said in an email to Reuters.

In a statement, the United Steelworkers union (USW) said it was unfair for the company to cut the employer contribution to 401K programs of workers keeping refineries and chemical plants in operation through the pandemic.

"Our members have continued to operate and maintain the facilities through the COVID-19 pandemic as essential workers," the USW said in a statement on Wednesday. "We are assessing our options and will be doing all we can to protect our members’ benefits."

Exxon did not reply to questions about cuts in benefits for top executives.

During a conference call with investors on Friday, Exxon Senior Vice President Neil Chapman said the company was planning both capital and operating expense cuts to defend its dividend.

Under the savings plan, the company matches a 6% contribution by an employee with a contribution equal to 7% of the employee's pay. Exxon will suspend the contribution beginning in early October.

"As business conditions continue to evolve, company match contributions to the savings plan will be reassessed," Exxon told employees on Tuesday.

At Exxon's Baytown, Texas, refinery and chemical plant, the local USW union plans to file a demand to negotiate over the change, said four sources familiar with the matter.

At Exxon's refineries and chemical plants in Beaumont, Texas, Baton Rouge, Louisiana, and Billings, Montana, no decision had been made on how to proceed, said the sources who are familiar with the union's plans.

(Reporting by Erwin Seba; editing by David Gregorio and Richard Pullin)