Oil and Gas Extraction Employment Has Fallen in 7 of the Last 10 Years, BLS Data Shows
According to Rigzone, the number of employees in the U.S. oil and gas extraction industry has fallen in seven of the last 10 years, with the most recent decline occurring in 2026. The figures, drawn from the U.S. Bureau of Labor Statistics Current Employment Statistics survey and accessed by Rigzone, paint a picture of a workforce that has never fully recovered from the mid-decade collapse, and shows no sign of bouncing back to previous highs.
Background
The BLS data, which spans January 2016 through March 2026, tells a stark story. Employment in oil and gas extraction peaked at 187,300 in January 2016, then fell sharply to 149,100 by January 2017 and continued dropping to a low of 110,900 in January 2022. A modest recovery followed, with headcount climbing to 122,000 in January 2024, but that rebound has already reversed. January 2025 came in at 119,800, and January 2026 dropped further to 115,500. Preliminary figures for February and March 2026 show 116,300 and 116,100, respectively, suggesting the sector has stabilized at those depressed levels rather than continuing to recover.
The only years in the past decade that bucked the downward trend were 2019, 2023, and 2024, each representing brief recoveries that were followed by renewed declines.
The BLS data is sourced from the national Current Employment Statistics survey, which each month covers approximately 119,000 businesses and government agencies representing roughly 622,000 individual worksites. The oil and gas extraction subsector, as defined by the North American Industry Classification System, covers exploration, drilling, completion, and equipping of wells, as well as field operations including separators, emulsion breakers, desilting equipment, and field gathering lines, up to the point of shipment from the producing property.
Analysis
The headline number, a decline from 187,300 to 115,500 over a decade, represents a workforce reduction of roughly 38%. But the more telling detail is the pattern: seven down years out of 10, including the most recent one. This is not a sector that had a bad stretch and moved on. It is a sector that has been structurally shedding workers, with only brief interruptions, for a full decade.
The three recovery years, 2019, 2023, and 2024, each coincided with periods of stronger commodity prices and drilling activity. But they produced only modest gains, and those gains were given back quickly. The 2023 to 2024 recovery added roughly 5,900 workers. By January 2026, the sector had already shed 6,500 from the 2024 peak.
That pattern has important implications beyond the headline numbers. When each recovery cycle adds fewer workers than the previous one, and when those workers are shed faster than they were added, it suggests that operators are structurally limiting their permanent workforce exposure. More work is being handled through contractors, service companies, and staffing arrangements rather than direct hires. That keeps operator headcount lean and flexible, but it also concentrates workforce risk in the service and subcontractor sector.
The workers who left in 2016 and 2017 often did not come back. Experienced hands in drilling, completions, production operations, and field services moved into other industries or retired. The skills gap that followed has been widely discussed, and the BLS data confirms that upstream employment never recovered sufficiently to suggest those workers were replaced at scale. A sector at 115,500 direct employees is operating with a significantly thinner bench than one at 187,300, and the pipeline of people with upstream field experience is correspondingly narrower.
With activity levels in basins like the Permian and the Bakken still requiring significant field labor, the math becomes a problem for everyone competing for the same shrinking pool.
What It Means for Subcontractors
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Labor competition is structural, not cyclical. The decade-long decline in direct oil and gas employment means the experienced field workforce is smaller than it was in 2016. Subcontractors competing for welders, operators, inspectors, and completions crews are fishing in a smaller pond, and that dynamic is unlikely to self-correct quickly.
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Wage pressure is real and persistent. A tighter labor pool with sustained demand means field labor costs are unlikely to fall meaningfully, even in softer commodity environments. Subcontractors should price their bids with that assumption built in rather than banking on labor market relief.
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Workforce retention becomes a competitive advantage. Companies that hold onto experienced hands through down cycles are better positioned when activity picks back up. The BLS data shows that recovery windows can be short, and crews lost during a downturn are not easily replaced.
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Expect more contract and third-party work from operators. As operators keep their direct employee counts lean, more of the field work falls to subcontractors and service companies. That creates opportunity, but also means the subcontractor sector is absorbing more of the workforce volatility that operators are managing away from their own books.
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Training pipelines need investment now. With direct industry employment at decade lows, the number of workers developing upstream field skills is constrained. Subcontractors who invest in apprenticeships, on-the-job training, and upskilling programs today are building the crew capacity they will need in the next upturn.
