Anadarko cuts hit home across the region
In the shadow of Anadarko Petroleum Corp.’s shining twin towers, friends chat over lunch at Fleming’s Prime Steakhouse and women browse the selection at Anthropologie, showing little sign of the economic hardship facing the community’s largest employer.
The company announced last week that it would slash 17 percent of its employees companywide — about 1,000 jobs — including an unknown number at its headquarters, a company spokesman said.
Anadarko Petroleum Corp. employed 6,100 people worldwide as of last year, about 4,000 of which were based at its global headquarters on The Woodlands Waterway.
The corporation moved its headquarters from Greenspoint to The Woodlands 14 years ago, completing construction on its 31-story Hackett Tower — the fraternal twin of the company’s Allison Tower — just two years ago
Unlike other major oil companies that have undergone several rounds of major cuts over the past year or two — Schlumberger, Halliburton, Baker Hughes Inc. — Anadarko has held off on personnel cuts until now.
The layoffs come about a month after Anadarko posted a $1.25 billion net loss for the fourth quarter of 2015 and an annual net loss of $6.7 billion, leading the company to cut its expected 2016 budget by half over last year.
Layoffs will have some impact on The Woodlands, but local officials are downplaying the effects of the job losses, instead focusing on the big picture of positive economic growth over the past year. The Woodlands gained more than 2,000 jobs in 2015, about 1,900 of those from Exxon Mobil alone, according to The Woodlands Area Economic Development Partnership.
In addition, the area’s unemployment rate is low, coming in at just 2.9 percent compared to a 4 percent unemployment rate for Montgomery County and 4.9 percent nationally, according to The Woodlands Area EDP 2016 labor market report.
“At the end of the day, our overall employment numbers go up. You hate it for the people who are affected. There’s nothing fun about it, but from an overall economic standpoint, this is the sixth downturn that I’ve been aware of and involved in. Every few years there’s a downturn but we come out better and stronger,” said The Woodlands area Chamber of Commerce President and chief executive officer JJ Hollie. Huge economic driver
Still, many of the residents who rely on oil and gas related jobs are nervous. One family of an Anadarko employee who retained his job said they’re cutting down on eating out and trying not to drive too much to save on gas — even with the low gas prices — just in case.
The oil and gas industry is undoubtedly a huge economic driver in The Woodlands and south Montgomery County, comprising 32 percent of the area’s major employers. The industry’s sluggish recovery after the oil began plummeting in mid-2014 and continued to drop throughout 2015 caused a bit of a stir in The Woodlands. The Woodlands Township revisited its 2016 budget early this year to rethink its sales-tax projections and amend its expectations. But even with layoffs announced, officials at the Township don’t believe it will translate to a big hit to Township revenues.
“There is a loss in oil and gas revenue in the community. That can’t be understated. The Township will be monitoring our tax receipts and make sure we’re staying within our budget. We’re adequately reserved in the community,” said Gordy Bunch, a Township board member. “For me personally, I feel for the families and the companies that are having to make these tough decisions.” Charities may suffer
And while Anadarko has served as a powerhouse for the local economy, the effects of the hardship may stretch beyond the business sector into the nonprofit sector. The company has rooted itself in financial support of community programs throughout its time in The Woodlands.
“Being a part of the community is something that’s built into the fabric of this company,” said Anadarko spokesman John Christiansen.
The corporation agrees to match its employees’ charitable funds — raising a collective $2.8 million for the Montgomery County United Way in 2015. Anadarko has also contributed to Habitat for Humanity, provided meals for the Montgomery County Food Bank, funded the county’s Women’s Center and Youth Services, financially supported the new Texas Children’s Hospital The Woodlands, donated laptops to The Woodlands Children’s Museum and helped bring The Way Home— a statue honoring fallen servicemen and women — to the community’s Town Center park.
As the company struggles through financial woes, Christiansen admits its charitable impact might sputter, but he believes it will remain a priority for the corporation and its employees.
“There are going to be impacts,” Christiansen said. “There are times you have to scale back … (but) I don’t think there’s going to be significant change in the support … It’s something that’s very near and dear to our company and to our employees, even in difficult times.”
Despite negative effects of the oil downturn, area officials and business leaders are not as concerned about the overall economic situation in The Woodlands as they might have been a few years ago. Booms in the area’s health-care corridor and other developments have helped diversify the local economy. Thousands of new jobs are expected to move into the area as a result of Texas Children’s Hospital The Woodlands and Houston Methodist The Woodlands Hospital, which are under construction. Both hospitals are slated for completion in 2017.
“Our economy is much more diverse. In The Woodlands, we have a large medical corridor with two major hospitals nearing completion. There are always two sides to any economic stories,” Hollie said. “The real news for me is that Houston and Texas in general has a great strong economy, and it’s not just based on one sector of the market or just one employer.”