US fossil-fuel firms laid off 1000s after receiving billions in tax benefits

Major US Fossil-fuel corporations have laid off tens of thousands of workers during the COVID-19 pandemic despite receiving billions of dollars in tax breaks from the government as part of its coronavirus relief measures, a report reveals.

A group of 77 companies involved in the extraction of oil, gas and coal received $8.2 billion under tax-code changes that formed part of a major pandemic stimulus bill passed by the US Congress last year, The Guardian reported Friday, citing data compiled by BailoutWatch, a nonprofit advocacy group that analyzes Securities and Exchange Commission filings.

Five of the companies, it noted, also got benefits from the paycheck protection program, totaling more than $30 million.

However, nearly all the energy firms began laying off their employees, with more than 58,000 people losing their jobs since the onset of the pandemic, or about 16 percent of the combined workforces.

According to the report, the leading beneficiary of the government assistance has been Marathon Petroleum, which received $2.1 billion in tax breaks.

Despite this, the Ohio-based refining company laid off 1,920 of its employees – nearly nine percent of its workforce -- during the year 2020. As a comparative ratio, the report adds, Marathon has received about $1 million for each worker it made redundant.

The report further points to other major oil companies such as Phillips 66, Vistra Corp, National Oilwell Varco and Valero as the next largest beneficiaries of the tax-code changes, with all of them slashing their work forces in the past year.

In the case of the Houston-based National Oilwell Varco drilling supply company, 22 percent of its workers were fired, despite federal government tax assistance amounting to $591 million.

Other huge energy firms, including Devon Energy and Occidental Petroleum, also received major pandemic tax benefits in the past year but still sacked thousands of their workers.

“I’m not surprised that these companies took advantage of these tax benefits, but I’m horrified by the layoffs after they got this money,” said BailoutWatch researcher Chris Kuveke as quoted in the report.

He further emphasized, “Last year’s stimulus was about keeping the economy going, but these companies didn’t use these resources to retain their workers. These are companies that are polluting the environment, increasing the deadliness of the pandemic and letting go of their workers.”

A spokesman for Marathon justified the layoffs of workers by asserting that the company made “the very difficult decision” to reduce its workforce, providing severance and extended healthcare benefits to those affected.

“These difficult decisions were part of a broader, comprehensive effort, which also included implementing strict capital discipline and overall expense management to lower our cost structure, to improve the company’s resiliency, and re-position it for long-term success,” the spokesman added as quoted in the report.

However, such expense management didn’t extend to the pay of Marathon’s chief executive, Michael Hennigan, who made a whopping $15.5 million in 2020— which is 99 times higher than the company’s average annual salary, according to BailoutWatch.

“They had no problem paying their executives for good performance when they didn’t perform well,” Kuveke underline, adding: “There is no problem with working Americans retaining their jobs but I don’t believe we should subsidize an industry that has been supported by the government for the past 100 years. It’s time to stop subsidizing them and start facing the climate crisis.”

Meanwhile, in face of rising political and social pressure in their role in the climate crisis and the deaths of millions of people each year as the result of air pollution, the oil and gas industry has tried to portray itself as the protector of thousands of American workers who face joblessness due to the new US administration’s climate policies.

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