Oil majors have become more efficient in the years since the shale bubble burst in 2014, producing record output with fewer workers.
Written by Julia Fanzeles and Will Kubzanski
Oilfield workers work on a service rig during a state-funded oil well taping operation in Midland. Photographer: Eli Hartman/Bloomberg
The U.S. oil and gas industry has cut 40% of its workforce over the past decade with record production, but those jobs are unlikely to return.
In an industry known for its booms and busts, high oil prices have historically led to increased drilling activity and, as a result, employment. But after the shale bubble burst in the mid-2010s, this relationship unraveled as investors continued to benefit for years.
Approximately 250,000 jobs have been lost since employment in the sector peaked in 2014, due to new technologies to drill cheaper and faster, corporate mergers and the rise of robots to replace humans on rigs. Meanwhile, production has surged by 50%.
Source: Bureau of Labor Statistics, Energy Information Administration
Note: Upstream oil and gas employment is calculated as the combined employment of three BLS industries: oil and gas extraction, oil and gas well drilling, and support activities for oil and gas operations.
In 2025, even as production reaches new highs and a pro-drilling president returns to the White House, salaries remain at the lowest level in three years.
“This industry is always cyclical. We ride the waves of good times and prepare for the bad times,” said Kerr Ingham, president of the Energy Producers Alliance of Texas. “But what’s different now is that even if prices recover, we won’t see the same recovery in employment as before.”
That means fewer career opportunities for people like geologist Shawn Carter, who was laid off in 2019 when the Oklahoma exploration and production company he worked for unexpectedly closed.
Thinking it would be temporary, Carter got into his truck from Houston, crisscrossing the Southeast and Midwest. More than six years later, he’s still driving and his dreams of returning to the industry are fading.
“My expectations aren’t that high,” Carter calls from his truck waiting at the loading dock.
In the years after the 2014 oil price crash, investors pushed companies to focus on profits rather than growth, sparking a wave of consolidation and job losses. Merger and acquisition activity in the sector has exceeded $500 billion since the beginning of 2023, an increase of more than 20% compared to the previous three years, according to Bloomberg calculations. Major companies have been cutting jobs over the past year as oil prices have fallen, with Chevron, ConocoPhillips and ExxonMobil all announcing layoffs for 2025.
U.S. oil producers are pumping a record 13.8 million barrels of crude oil per day, with active drilling rigs producing less than a third of what they were in 2014. That means each rig now produces about four times as much oil as it did a decade ago, and is “extremely efficient,” according to Ingham, thanks to powerful equipment, sophisticated technology, automation, and incentives for workers to drill faster.
Source: Baker Hughes, Energy Information Administration
Note: Data represents percentage change since December 2017
The Trump administration arrested former President Nicolás Maduro in an attempt to gain access to Venezuela’s vast oil reserves, but executives at major U.S. oil companies have expressed caution about investing in the country. Fernando Valle, managing director of Hedgeye Risk Management LLC, said analysts similarly doubt the move will create more jobs for Americans in the sector because domestic labor is available and likely much cheaper.
Since taking office last year, President Donald Trump has made increasing U.S. oil and gas production a priority by loosening environmental regulations and pushing to open more federal lands and waters to drilling. But some experts doubt that proposals to expand offshore drilling will create new jobs. Ramanan Krishnamoorthi, an energy professor at the University of Houston, said these rigs will be unmanned in the future.
“They will be performed entirely by robots and automation, and much of it will be handled on land,” Krishnamoorthi said. “The oil and gas industry will look very different. There will be far fewer jobs, and the jobs that remain will be out of harm’s way.”
At current oil prices of about $60 a barrel, producers in some regions are just around the break-even point, a level that’s enough to keep wells running but too low to increase profits. It’s a fine line for President Trump, who wants to advocate lower gas prices for ordinary Americans while also promoting the industry’s profitability.
Energy executives surveyed by the Dallas Fed said oil prices would need to be around $65 a barrel to justify drilling new oil wells. Prices have been below that level for the past three months, but will need to remain elevated to convince producers to increase spending.
“It’s tough trying to squeeze out as much cost as possible,” said Trey Cowan, an analyst at the Institute for Energy Economics and Financial Analysis. “The Labor Party is the first place to show its strength.”
Thanks in part to efficiency gains, some producers who cut back on jobs are doing better than expected. In the latest quarter, ConocoPhillips’ production exceeded the company’s highest expectations despite lower capital spending. Similarly, Chevron saw increased production in the Permian Basin despite fewer rigs.
Carter has come close to returning to the industry multiple times. Most recently, Marathon Oil called him in May 2024. After he was runner-up in his previous position, the company asked him to consider another position. He said he was interested and was told to contact me within a few days.
A few days later, as I was driving to a Costco in Tulsa, Oklahoma, I heard on the radio that ConocoPhillips had made a bid to buy Marathon.
“I was like, ‘Oh, I know what that means,'” Carter said. He never heard of the position again.
— With contributions from David Wethe, Kevin Crowley, Alex Newman, Jade Khatib, Cecile Daurat, Marie Monteleone, and Reade Pickert.
Share this:
