A pair of new reports issued on Monday portray a domestic oil and gas industry entering into a new consolidation cycle even as it is shedding tens of thousands of jobs that won’t be coming back anytime soon. It’s a scenario the industry has repeated often in the past.
Deloitte’s new report, titled “The future of work in oil, gas and chemicals,” posits that the great preponderance of the 107,000 industry jobs lost this year (per U.S. Department of Labor statistics) will not be staging any sort of a comeback before the end of 2021. In the most likely, “business as usual” scenario used in its statistical analysis, Deloitte projects that only about 30% of those jobs would be restored during that time frame.
That’s the good news. The bad news is that, should oil prices remain depressed and drop back down below $35 per barrel, the firm’s experts project that 97% of those lost jobs would remain lost.
Deloitte notes that the industry is plagued during this downturn not only by depressed commodity prices, but also due to the rapid up and down cycling in the shale industry, which is now going through its second downturn in just the last six years. This rapid cycling has created a high degree of sensitivity to oil price levels in oil and gas industry hiring practices, leading to the most rapid layoffs in recent history this year in the upstream and oilfield services sectors. “Such large-scale layoffs, coupled with the heightening cyclicality in employment, are challenging the industry’s reputation as