Well-regarded employment research from Challenger, Gray & Christmas says the oil industry has shed 195,415 jobs. If crude stays below $40 a barrel, the trend may continue.
According to the firm:
Of the 94,936 job cuts in the energy sector announced this year, 83,412 have been blamed on oil prices. In all, low oil prices have claimed 195,415 jobs since mid-2014, mostly in the energy and industrial goods sectors.
A second trend will hurt the industry in the future:
Indeed, a report released earlier this year by the American Petroleum Institute indicated that petrochemical companies will need to hire about 30,000 new workers each year over the next two decades to replace retiring employees.
The oil industry is not the only one with the need to replace retiring workers. As well-educated baby boomers leave the workforce, the need for replacements throughout the economy will rise.
Notably, across all industries, layoffs are high, according to the firm’s July jobs study.
To date, employers have announced 359,100 job cuts in 2016. That is down 8.7 percent from the 393,368 job cuts announced from January through July 2015.
As gross domestic product growth has fallen to barely 1%, and corporate earnings have suffered another bad quarter, the effects on jobs have to show up in future jobs reports. Over the past few months, the unemployment rate data has been choppy.
No matter what the chop in the balance of the workforce, energy will take a long time to recover. As oil moved above $50 two months ago, things started to look better. Over the past few weeks, as prices have cratered again, the pressure to cut jobs has returned.