Exxon to shutter two Houston office towers

Exxon Mobil Corp. plans to close two Houston-area office towers after a raft of of unprecedented job cuts and employee departures over the past year and a half.

Workers in the suburban office buildings known as Hughes Landing in The Woodlands will relocate to the oil giant’s main Houston-area campus a few miles away, according to an internal memo seen by Bloomberg.

The closure is the latest turn in Exxon Chief Executive Officer Darren Woods’ effort to recast what was once the most-profitable U.S. corporation after backto-back oil busts and ascendant environmentalism called into question the company’s strategy.

“We look forward to bringing our teams together and having them collaborate on the Houston campus,” Exxon said in an email Friday.

Exxon announced its first major job cuts in decades last year, with 1,900 U.S. employees let go as part of a global effort to shrink headcount by 15 percent. But Exxon’s U.S. workforce has been further reduced following the last two performance review cycles, people familiar with the matter said earlier this year.

“The assessment process is not a headcount reduction exercise,” Exxon said in the statement. “It is an annual process for performance improvement. Employees who separate from the company through the annual assessment process may be backfilled.”

Exxon signed the lease at Hughes Landing in 2013. It had a capacity for 1,400 employees, according to local press reports at the time.

Exxon’s first annual loss in four decades in 2020 prompted Woods to take an aggressive approach to cutting costs in an effort to sustain the company’s $15 billion-a-year dividend.

The company reduced “structural costs” by $3 billion in 2020 and Woods expects to double that amount by 2023, he said on a conference call with analysts in July. Buoyed by the cuts and rising oil prices, the stock is up more than 50 percent this year.

Efforts to move out of Hughes Landing have been complicated by tax abatements awarded when the company first moved in. The company is negotiating an early end to those obligations.

“We believe the matter will reach resolution soon,” Exxon said in the statement.