Pemex, Mexico’s state-owned oil company, is in a financial mess. It’s been struggling for years, piling up debts with suppliers and even cutting salaries for its own workers. Now, it’s planning to cut jobs to save money.
The production of oil and gas is also down, which is a big problem. Foreign investors might lose confidence in the company if they think it’s not going to turn things around. To start getting back on track, Pemex is looking to cut costs by reducing its workforce. This could save the company around 4.8 billion pesos.
The goal is to trim the fat in the administrative areas, not in the strategic parts of the business. Pemex says it won’t touch key positions during the layoffs. In fact, the company estimates that the job cuts will be less than 1.4% of its permanent staff. This should save around 3.5 billion pesos by 2025.
The plan is to eliminate duplicate jobs and streamline the administrative area, which currently takes up 71% of the company’s payroll. Pemex is still figuring out how many jobs to cut to make a significant impact. While the company hasn’t given an exact number, experts estimate that up to 3,000 jobs might be on the chopping block.
Pemex is also working on other strategies to cut costs. It’s freezing current job openings and cutting back on personal services for administrative staff. The company hopes these measures will lead to significant savings. However, with over 101 billion pesos in debt to suppliers and contractors, and around 20 billion pesos to pay this year, it’s still unclear where these savings will be applied.
Meanwhile, Pemex’s oil production continues to slump, with a daily loss of over 209,000 barrels. This represents a 10% drop. To turn things around, the company needs to come up with a production strategy to boost its oil output. If not, it risks facing another crisis on top of its financial woes.
It’s clear that Pemex has a lot of work to do to get back on track. The big question is how many jobs will be cut and whether these layoffs will affect not just administrative staff but also workers in the production plants and refineries. For now, the focus is on cutting jobs in the administrative area, but only time will tell how this will all play out.