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Exxon axed retirement and education benefits for US workers to cut costs amid the oil market meltdown, leaked documents reveal

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Exxon axed retirement and education benefits for US workers to cut costs amid the oil market meltdown, leaked documents reveal

An Exxon gas station in Clark, New Jersey Michael Loccisano/Getty Images This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Challenged by the oil-price downturn, Exxon is taking a number of steps to cut costs. The oil giant is suspending several benefits for US workers, including its matching program…

Exxon axed retirement and education benefits for US workers to cut costs amid the oil market meltdown, leaked documents reveal

Exxon gas stationExxon gas station

An Exxon gas station in Clark, New Jersey

Michael Loccisano/Getty Images


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Exxon has suspended several benefits for its US workers amid the oil price downturn, including retirement account matching, education refunds, monetary employee recognitions, and some assistance for expats, according to documents reviewed by Business Insider. 

After October 1, Exxon will no longer match retirement contributions of US workers, “as part of the corporation’s effort to reduce costs in response to the current business environment,” a memo seen by Business Insider said.

The company, based in Irving, Texas, also made several changes to its program for employees based overseas to cut costs, such as suspending host-country language assistance, another memo shows. Earlier this year, Exxon suspended its program that reimburses employees for relevant education courses, as well as financial aspects of its employee recognition program, which is designed to “foster employee motivation and loyalty,” according to additional documents.

The retirement-benefit change was first reported by Reuters, but the other benefit cuts haven’t previously been reported. 

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These changes are among many cost-cutting measures Exxon has taken since the price of oil began crashing in March. Last week, the company reported a loss of more than $1 billion for the second quarter of the year.  

Exxon is shrinking its salaried workforce by as much as 8% through its annual performance review cycle, as Business Insider previously reported. On Wednesday, Ashley Alemayehu, an Exxon representative, said that the company may cut workers in order to reduce costs.

Read more: Internal documents, leaked audio, and 20 insiders reveal Exxon made managers dub more employees poor performers as the oil giant sought to quietly cut staff

“The suspension is part of the company’s effort to reduce costs in response to the impact of the pandemic,” Alemayehu said. “There is potential for further reductions based on long-term structural efficiencies, reduced activity and an evaluation of workforce requirements.”

Alemayehu said Exxon, which has about 75,000 employees, is on track to “meet or exceed” spending reduction targets announced in April, when the company said it was reducing its 2020 capital spending budget by $10 billion. 

ExxonMobil's Fife Ethylene Plant, on March 3, 2020 in Cowdenbeath, Scotland

An Exxon ethylene plant in Cowdenbeath, Scotland

Ken Jack/Getty Images


Exxon is suspending key benefits for US workers

Exxon workers in the US were informed on Wednesday morning that the company was suspending its matching contributions to employee retirement savings plans. Typically, if a worker contributes between 6% and 20% of their pay into a retirement savings account, Exxon will match it with 7% of that employee’s salary. 

“As business continues to evolve, company match contributions to the savings plan will be reassessed,” a memo said. 

Effective May 1, Exxon also suspended its educational refund program, which provides reimbursement for relevant tuition, fees, and books for all employees on its US payroll who are not represented by a union. The company cited the “current business environment” in a document seen by Business Insider. 

Exxon also suspended certain financial benefits as part of its employee recognition program, such as gift cards. Other examples of recognition that fall under the program include “cake reception for a group” and “dinner with spouse,” according to another document seen by Business Insider.  

FILE PHOTO: An Exxon sign is seen at a gas station in the Chicago suburb of Norridge, Illinois, U.S., October 27, 2016. REUTERS/Jim Young/File Photo

FILE PHOTO: FILE PHOTO:An Exxon sign is seen at a gas station in the Chicago suburb of Norridge

Reuters


Changes to Exxon’s international travel policy

Exxon also made a handful of changes to its policy for expats, American workers outside the US, according to a memo dated May 2020. Those include removing specific guidance on the number of travel days an employee receives for a given work trip. 

“Some recovery time from annual home trips and R&Rs is reasonable, however, the expatriate program will no longer define number of travel days based on length of travel,” the memo said. 

The company is also temporarily suspending “host country language assistance,” among other changes. 

Get the latest ExxonMobil stock price here.

Get the latest Oil WTI price here.

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