Just curious. Will we see any other reductions in staff this year after the 8% that is PIP’d are gone? Or will the next round just be the bottom of next years rankings?
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I expect headcount at XOM to drop from 76k (2019) to 68k by 2022. Field/asset sales, PIP, lower hiring, normal retirments plus people encouraged to retire, plus lower pay raises and promotions may get even good performers to look elsewhere. Note that bottom 20% of executives do not get EBU and RSU so there is incentive to leave because pension (3 year average) is impacted by low EBU
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I predict a second wave of PIP-driven layoffs in 2021 and another in 2022. The exact percentage may change (e.g. back down to 5% or 3% per year), depending on how many leave for retirement or better opportunities, but there will be more. It just a shame that they would rather get rid of experienced, very good technical people, when there’s at least 2 levels of middle manager that could be removed without any detrimental effect on company performance.
ExxonMobil has all the traits that GE, RIM, Kodak, etc. displayed as they were circling the drain. From an anonymous Quora user:
“I worked for Nokia until just after the Elopacalypse (Nokia's capulation to Microsoft).
It was pretty bad. There was an air of dismal futility to everything we did.
People began quietly resigning, one or two per week.
There was a lot of denial. The halo-spin that is typical inside a corporation takes on surreal dimensions as people lap up the last drops of kool aid. "The next device would save the company. It's AWESOME!"
Management begins to over-steer, making ever larger corrections and counter-corrections. Focus is lost entirely. Re-orgs begin to happen annually, then semi-annually.
Blame gets pushed down the organization. I saw some veteran employees whose work was held in high regard suddenly found to be "under performing" during this period. Their manager doesn't even know them because of so many re-orgs.
This became very, very toxic.
My advice to anybody at a dying company is to get out, don't kid yourself that you can somehow make a difference. Even if you do, the organization is too busy dying to notice.”
Replace Nokia with XOM and I would see no difference.
I see the PDS structure changing back to the old structure in the next year or two. The change was made to build a portfolio to justify terminations and the extension to the bottom line was done in order to reduce headcount.
The tricky part is will they be able to attract the same talent if they know they can be living on a borrowed year of employment and then can be searching again? I worked for GE when they implemented a similar program and we did away with recruiting out of colleges as they avoided us like the plague when the ranking structure came up. Most that did come in were immediately looking for a new job to avoid being a percentage.
They have to do better.
Functional plans for downstream sector have headcount reductions through '22 at least, so I'd say it's pretty safe to assume that PIP's will continue in the following years.
As a side note, the company has been using PIP's prior to this year, so it's not like this is a new concept. The toss-up will be if the 8% guidance will extend to next years ranking cycle. The guidance will maybe change depending on covid impacts in the fall/winter and if countries/states go for a 2nd round of lockdowns or not.