Phillips 66 to Lay Off Workers at LA Refinery Amid Industry Changes
Phillips 66, one of the largest American multinational corporations in the oil and gas industry, has announced plans to lay off hundreds of workers at its Los Angeles-area refinery by the end of 2025. The layoffs, expected to begin in December 2025, are part of the company’s ongoing strategy to streamline operations, reduce costs, and adjust to economic pressures and an increasingly stringent regulatory environment in the energy sector. These changes come as Phillips 66, like many other major players in the oil industry, grapples with the complex challenges of an evolving market landscape.
Impact on Employees and the Local Community
The Los Angeles refinery has long been a key component of the region’s energy infrastructure, providing refined products and supporting thousands of jobs. However, with the company facing both internal and external pressures, Phillips 66 has made the difficult decision to scale back operations. According to sources familiar with the matter, approximately 600 employees and 300 contractors will be affected by the layoffs. These workers represent a significant portion of the workforce at the refinery, and many are represented by the United Steelworkers Union, which has already expressed concerns about the impact of the layoffs.
Union leaders have urged Phillips 66 to provide fair severance packages and job retraining programs for displaced workers. “Our members have worked at this refinery for years, sometimes decades. They deserve a smooth transition and the support needed to move into new career opportunities,” said a union spokesperson. The union has also demanded that the company negotiate to ensure that those workers who remain employed at Phillips 66 are given job security in the face of these ongoing changes.
Phillips 66’s Strategic Shift
Phillips 66, headquartered in Houston, Texas, has faced increasing challenges in recent years, with rising regulatory pressures and market dynamics forcing it to rethink its business model. One major driver of the decision to reduce workforce at the Los Angeles refinery is the company’s plan to address the ongoing economic challenges faced by the oil industry. The refining sector has been under significant pressure due to lower fuel demand, especially in the aftermath of the COVID-19 pandemic, and a shift in consumer behavior toward cleaner, greener energy solutions.
In addition to these financial pressures, Phillips 66 is also responding to California’s aggressive push toward reducing fossil fuel dependency. In 2025, the state of California is on track to meet its ambitious climate goals, including a legislative mandate to phase out fossil fuel use and transition to renewable energy sources by 2045. This is part of California’s broader commitment to reducing greenhouse gas emissions and combating climate change. As a result, refineries like Phillips 66’s Los Angeles operation are facing increased scrutiny and restrictions, which have only compounded the company’s financial difficulties.
The Future of the Los Angeles Refinery
The fate of the Phillips 66 Los Angeles refinery is uncertain, as the company has not yet revealed what will happen to the site once it is fully decommissioned. While some workers will be relocated to other Phillips 66 facilities, including the company’s marine oil terminal in Los Angeles, it remains unclear whether the company intends to sell the property or repurpose it for other purposes. In recent years, some oil companies have been seeking to divest aging or unprofitable refinery assets, while others have invested in upgrading existing infrastructure to adapt to new energy demands.
The closure of the refinery is also part of a broader trend within California’s energy sector. The state’s commitment to transitioning to renewable energy sources has led to the closure or downsizing of several oil refineries in recent years. In 2024, for example, Chevron announced a significant downsizing of its operations in the San Francisco Bay Area, citing similar regulatory and economic challenges. These closures have sparked debates about the future of fossil fuel-dependent jobs in California and the ability of displaced workers to transition to the growing renewable energy sector.
Broader Implications for California’s Energy Industry
The Phillips 66 layoffs come at a time when California is making substantial strides toward meeting its clean energy goals. In the state’s 2025-2045 climate action plan, there are provisions aimed at helping workers displaced from traditional energy industries to find new jobs in the renewable energy sector. California Governor Gavin Newsom has pledged to create job retraining programs, increase funding for workforce development, and provide financial assistance to help workers transition into sustainable industries.
Despite these efforts, the shift away from fossil fuels presents significant challenges, especially for workers who have spent their careers in the oil and gas sector. The Phillips 66 layoffs highlight the growing divide between traditional energy jobs and the green jobs that are central to the state’s future plans. While renewable energy industries such as solar and wind power are expanding, many workers at refineries are uncertain whether they will have the skills needed to transition into these new fields.
In addition to the broader economic implications, the closure of the Phillips 66 refinery and other similar facilities raises questions about California’s energy security. While the state is committed to transitioning to cleaner energy, there are concerns about the stability of the energy grid in the short term. Refining plays a critical role in producing the gasoline, diesel, and jet fuel that power much of California’s transportation and aviation sectors. As the state moves away from fossil fuels, there will be growing challenges in ensuring a reliable and affordable energy supply.
Looking Forward: The Role of Renewable Energy
As Phillips 66 moves forward with its plans to reduce its operations in Los Angeles, it is also part of a broader shift within the energy sector. Some oil and gas companies are adapting by investing in renewable energy, aiming to diversify their portfolios and align with market trends that prioritize sustainability. Companies like Shell, BP, and ExxonMobil have increasingly focused on developing renewable energy projects, including solar, wind, and biofuels, as part of their long-term strategy.
For Phillips 66, transitioning to a greener future may involve scaling back its refining operations while increasing its focus on renewable energy. The company has already made significant investments in biofuels, which could provide a way for the company to remain competitive as the world moves toward cleaner energy solutions.
As California’s energy sector continues to evolve, Phillips 66’s decision to reduce its workforce and decommission its Los Angeles refinery serves as a reminder of the pressures facing the fossil fuel industry and the broader implications of transitioning to renewable energy. While the path forward is uncertain, the shift represents a critical moment in California’s commitment to climate action and the future of its workforce. For the workers affected by these changes, the hope is that job retraining programs and new economic opportunities in the green energy sector can provide a path forward.