Investors were cautiously optimistic on Thursday about ExxonMobil‘s (NYSE: XOM) plans to reorganize its operations. The energy-giant’s stock was up by 0.4% on the day, which was better than the benchmark S&P 500 index’s 0.9% decline.
ExxonMobil will merge several of its business units, echoing plans it divulged slightly over one year ago. The company confirmed and elaborated on the new plans, following a report on same that was published in The Wall Street Journal.
The latest announced reorganization will see the energy company create three new business units, and a number of small company divisions will fall under them. Divisions undergoing the consolidation process will include financial services and procurement, according to the Journal‘s article.
Such consolidation will reduce expenses, while theoretically giving the larger units more power to negotiate with business partners and suppliers.
Although ExxonMobil famously booked a record annual net profit in 2022 — a hard-to-conceive $55.7 billion on a GAAP basis — the sprawling multinational company is eager to trim costs. It said that its goal is to save $9 billion from 2019’s spending level in 2023.
“We want simpler processes and more modern tools that allow us to work more quickly and with less frustration, at lower cost,” ExxonMobil stated in a memo to financial news agency Reuters.
All told, in 2022, the company shelled out $22.7 billion on capital and exploration expenditures, which was over $6 billion — or 33% — higher than the 2021 number.
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