Pemex Eyes Job Cuts to Save $540 Million Via Restructuring
(Bloomberg) -- Mexico's state oil company Petroleos Mexicanos is discussing plans to slash over 3,000 jobs in a proposed corporate restructuring that is expected to save the company millions as the indebted driller and refiner tries to shore up its finances and boost production.
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Pemex aims to cut as many as 3,114 tenured employees as part of a larger restructuring push that is expected to save the company around 10.5 billion pesos ($540 million), according to a company document dated April and seen by Bloomberg News. The cuts would amount to about 28% of the operational budget for tenured personnel this year, the document said.
A Pemex spokesman declined to comment. An Energy Ministry spokeswoman didn't immediately reply to a request for comment. The document did not specify the state of the discussions or whether the plan had been approved.
While the savings amount to just over 2% of Pemex's total $22.75 billion operating budget for 2025, the cuts help shore up the company's balance sheet as it seeks to dig itself out from under a more than $100 billion debt burden and boost production.
The restructuring would transfer 5.25 billion pesos from the company's personnel budget to its exploration and production arm in a bid to boost output, according to the document.
Pemex posted its fourth straight period of negative results last quarter, and roughly $30 billion in losses last year. Crude and condensate production has slumped to 1.62 million barrels per day, down 11% from a year earlier and near a 40-year low, largely due to Mexico's maturing oil fields.
The operation would also eliminate three sub-directorates with Pemex's production arm, eliminate nine management areas and transfer their remits into other departments, remove duplicate jobs and streamline decision-making, according to the document.
The staffing cuts are a blow to Pemex's powerful unions, which represent over 80% of the company's roughly 130,000 person workforce. The layoffs are also an about face in policy for Pemex leadership, after President Claudia Sheinbaum said in February the company wouldn't cut its employees.
Pemex's total financial debt stood at $101 billion in the first three months of the year. The company is working with the federal government to craft a payment plan for its roughly $18.7 billion in financial debt maturing next year, company officials said in the company's latest earnings call.
Pemex bonds were little changed after US trading hours on Thursday. Company notes due 2027 had closed 0.2 cents lower at just under 99 cents on the dollar.
The document was reported earlier by local newspaper Reforma.
(Updates with additional context from fourth paragraph)
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