By Collin Eaton

Competition for engineering and geologist jobs in the oil-and-gas sector was already fierce -- and that was before President Trump's tariff blitz sparked fears about a global recession that sent oil prices tumbling.

Chevron, BP and other oil companies are offshoring more specialized white-collar positions and related work to lower-cost labor pools in countries such as India, while cutting thousands of jobs elsewhere.

The shift, alongside a string of mergers and cost-cutting, has thinned the companies' ranks of skilled U.S. workers. It has also disrupted the industry's pecking order, which for decades has been topped by specialized engineers whose positions were more insulated during oil busts.

Chevron said in February that it would cut as many as roughly 8,000 jobs, or 20% of its global workforce, by the end of next year. That decision has prompted angst at its global headquarters in Houston, where many of its higher-paid skilled workers are based.

The same day, the oil behemoth said it was "changing how and where work is performed" and would expand the use of global centers, such as one in India where it aims to add about 600 jobs by the end of this year. About half of Chevron's nearly 40,000 employees are in the U.S.

That decision reflects a growing pool of skilled workers in India who are willing to do the same jobs for a fraction of the cost, along with advances in technology that enable remote working. Engineers there have long drawn salaries around a third or a fourth the size of their counterparts in the U.S., though pay is climbing thanks to rising demand for talent.

"India seems a lot less distant," said Nicholas Bloom, an economist at Stanford University who has advised companies on work setups and remote work. "Many managers have told me comments like, 'Our remote operations are typically 90% as efficient, but 70% of the cost, so it's a great deal for us.' "

The new positions aren't only traditional back-office jobs that U.S. companies have offshored for years. Chevron intends to hire engineers, geologists and environmental scientists in India as part of a $1 billion investment to develop an engineering and innovation hub near Bellandur, a suburb of Bengaluru, a spokesman said.

Hiring for skilled posts in the U.S., meanwhile, has slowed to a pace typically associated with an oil downturn, recruiters say. The slowdown is creating gaps in the résumés of experienced oil workers, forcing some to take pay cuts in new roles and dissuading recent college graduates from joining the industry.

Amanda Rico, a career adviser in Houston with Rico Editorial Services, said workers with advanced degrees are competing more fiercely for fewer jobs. Across the U.S., the number of oil-and-gas jobs has dropped almost 15% since mid-2019 to about 123,000, according to the Bureau of Labor Statistics.

Connor Cabaniss, a senior petroleum engineering student at the University of Texas, said he and some of his classmates have expanded their job searches across the oil-and-gas value chain because postelection uncertainty has led many oil-and-gas companies to slow their hiring.

Cabaniss, who is graduating in May, has had multiple interviews, but isn't receiving as many calls in recent months. He is hopeful the cyclical business will turn around soon.

"Even postelection, they still really don't know what the market's going to be like," Cabaniss said.

Since Trump launched his tariff blitz in early April, U.S. oil prices have tumbled 12% to near $63 a barrel, a level that is expected to prompt some soul-searching in the industry. If prices remain near those levels for long, frackers will have to re-evaluate their spending levels.

Although Chevron and the other major oil companies are more cushioned than the smaller competitors, they are still likely to face pressure to curb or recalibrate their investments in long-term projects.

Like Chevron, Exxon Mobil has also been expanding in India, with a tech hub that helps oversee work related to its Guyana project and other assets. Exxon has also invested in technology centers in China, Malaysia and Qatar. At the end of last year, its global head count was down about 19% since the start of the Covid-19 pandemic, according to regulatory filings.

European oil giants Shell, BP and TotalEnergies were early entrants to the job market in India, where they made investments in lubricants, gas and renewable energy. Together, they employ more than 21,000 in the country. BP recently said it plans to cut 4,700 jobs elsewhere.

The competition for engineers in India is so fierce that the oil companies are struggling to hire workers quickly and are known for luring experienced candidates from their rivals with higher pay.

Beyond its skilled workforce, India is an attractive growth market: Its natural-gas consumption is set to grow almost 60% by 2030, according to the International Energy Agency. Trump recently touted a deal for India to buy more American fossil fuels after a White House meeting with Prime Minister Narendra Modi.

The timing of the hiring slowdown in the U.S. is somewhat ironic because Trump's trade war is meant to restore jobs and manufacturing. The president's friends in the oil patch had expected his rollback of regulations to spur job growth in the sector.

"Typically, that would have been a boom for the U.S.," said Debbie Milks, chief operating officer of recruiting firm Brookwoods Group. "We're not seeing that at all."

Write to Collin Eaton at collin.eaton@wsj.com

(END) Dow Jones Newswires

April 22, 2025 05:30 ET (09:30 GMT)

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