Marathon Petroleum Corp. is trimming 12% of its workforce because of a decline in demand as a result of the coronavirus crisis, the company said.
The layoffs, as well as the indefinite closure of the company's refineries in California and New Mexico, will affect around 2,050 staff, Marathon said.
The job cuts reflect the ill effects of the virus on the world's refining business, which has seen a capacity glut as people telecommute and airlines function at a fraction of their former operations.
U.S. gasoline futures have dropped by more than a quarter from a year ago and oil is trading a third lower. Refiners can't see when demand will normalize.
The Findlay, Ohio-headquartered Marathon - the biggest independent oil refiner in the U.S. - will sustain a $175 million charge in the third quarter for retrenchment, the company told the U.S. Securities and Exchange Commission.
Marathon, which can produce more than 3 million barrels a day, had terminated around 60 employees by Tuesday at its Galveston Bay facility in Texas and another 60 were made redundant at the refiner's Los Angeles plant, sources said.
The company's Galveston Bay facility may shed up to 100 staff in the next few days and up to 200 before the retrenchment ends. It had ended the job contracts of around 45 workers at the Garyville, Louisiana, plant, sources said.
According to Andrew Lipow, president of the consultancy group Lipow Oil Associates, the coronavirus had resulted in "near-record lows on diesel margins," the main product for refineries as Marathon heads into the winter heating season," Reuters quoted Lipow as saying.
Marathon is estimated to have suffered losses of up to $798 million in the third quarter, the average projections of market observers showed.
