As low oil prices begin to effect global energy markets, one company is taking drastic steps to cut losses, and it means cutting jobs. Petróleos Mexicanos (PEMEX) cut company contracts this week, resulting in a lay-off wave of 10,000 workers with more cuts are expected in coming weeks, according to Bloomberg.
PEMEX informed most of the companies it partners with that contracts would not be renewed due to the plummeting oil prices which have carried over from 2014. This price slump has caused the state-owned oil company to make hefty budget reductions for 2015. Many of those companies are based in Ciudad del Carmen on Mexico’s Gulf Coast, and the secretary at the Ciudad del Carmen Economic Development Chamber, Gonzalo Hernandez, told Bloomberg that job losses could skyrocket as high as 50,000. Cuidad del Carmen’s population as of 2007 was 154,197, which means more job losses could devastate the city’s economy.
Despite PEMEX’s position as the ninth largest oil producer in the world, the company’s production has continued to fall for a decade straight. The third quarter of 2014 saw $4.4 billion in losses for the oil giant. PEMEX officials, however, say that the number of job cuts has been exaggerated, and noted that some contracts were not renewed because the partner companies’ services were no longer required.
Aside from failing to renew contracts, PEMEX seems to be putting 2015 off to a good start. In the first week of the new year, the company completed its interoceanic pipeline in southern Mexico and has worked to put more offshore rigs in the Gulf of Mexico.