Low oil prices have cost tens of thousands of American jobs

May 12, 2015

EnergyLayoffs051215

As this Reuters graphic shows, planned layoffs in the energy sector have grown precipitously this calendar year, reflecting badly bruised oil prices. According to the outplacement firm Challenger, Gray and Christmas, employers announced workforce reductions totaling 61,582 in April–53 percent higher than the same month a year ago. So far this year, employers have announced 201,796 planned job cuts, which marks a 25 percent increase from the 161,639 layoffs tracked in the first four months of 2014. This is the largest four-month total since 2010.

While low oil prices provide a net employment increase for the majority of U.S. states, those particularly invested in oil production are seeing the employment pinch coincide with a dramatic fall in oil and gas severance-tax revenues.  Last week the number of active oil rigs in the U.S. fell again for the 22nd straight week, and the 668 working rigs is off 58 percent from an October high of 1,609. Every oil drilling project in the world has a break-even price, beneath which production becomes a self-inflicted wound to one’s bottom line. As they ride out the price slump, U.S. producers appear to be choosing painful job cuts over shooting themselves in the foot financially.

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