Nearly 400 workers at the Pioneer Natural Resources headquarters in Irving are in line to see their positions cut by the company’s new owner, Exxon Mobil, leaving more than a million square feet of office space in limbo.
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Exxon Mobil informed the state it plans to lay off 397 workers in Texas. Nearly all of them are employees at the 1.1M SF office building the energy company received as part of its acquisition of Pioneer, CoStar reported.
Exxon Mobil purchased Pioneer last October in an all-stock transaction worth almost $60B.
After the deal was announced, Pioneer founder Scott Sheffield told The Dallas Morning News the Irving office would stay open for at least two years. Around 1,000 employees worked in the office when the deal was announced.
But while Exxon Mobil offered positions to nearly all Pioneer employees, it said in a Worker Adjustment and Retraining Notification filing with the Texas Workforce Commission that 397 are likely to be part of “planned separations.” That amounts to nearly 20% of Pioneer’s workforce before the acquisition.
“Our employment strategy has not changed — the success of this merger depends heavily on the retention of Pioneer's talented workforce, and more than 1,900 Pioneer employees were offered jobs as part of the merger, with well over a majority accepting their offer of employment,” Exxon Mobil Public and Government Affairs Manager Jared Young said in the letter to the state.
According to Exxon Mobil’s state filing, 376 of the job cuts will be from the Pioneer headquarters in Irving. The company is expected to cut 110 employees by the end of 2024 and 178 in 2025. The final 109 layoffs will happen in 2026, according to the Houston Chronicle.
Pioneer is the only tenant of the building at 777 Hidden Ridge Drive, which was built in 2019. Pioneer sold the 10-story building to PRP for more than $584M nearly five years ago.
Office landlords and brokers were already keeping an eye on Houston for possible mergers and acquisitions due to the weakened financial sector. Now, they could add Dallas-Fort Worth to their list.
Should Exxon Mobil decide to put the Irving office building on the market, it would be another hit to the Metroplex's office vacancy rate, which stands at 26%, according to Avison Young’s third-quarter office report.
CoStar data shows DFW developers have nearly 6M SF of new office space under construction, with around 15% of that preleased. Dallas is already high in the rankings of metros with the most vacant office space nationally, claiming the No. 3 spot behind New York City and Chicago.
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