Phillips 66 has announced plans to initiate layoffs at its 139,000-barrel-per-day Los Angeles-area refinery starting in December 2025. The company had previously disclosed in October 2024 that it would begin winding down operations at the facility in October 2025. The refinery, located in the city of Wilmington, is one of California’s most prominent fuel processing plants, and its closure marks a significant shift in the state’s energy landscape.
Approximately 600 staff members and 300 contractors are employed at the refinery, with over half of the workforce represented by the United Steelworkers Union. The layoffs will primarily impact these employees, as the company moves to reduce its workforce in preparation for the shutdown. However, Phillips 66 has pledged to support those affected by the layoffs through severance packages, job placement assistance, and other transitional services. In an effort to minimize the impact on some workers, Phillips 66 plans to relocate some retained employees to its Los Angeles marine oil terminal, where operations will continue.
This refinery closure is part of a broader trend in the U.S. refining sector, as several companies are scaling back operations amid rising environmental regulations and increasing pressure to transition to cleaner energy sources. Just a few months earlier, Valero Energy announced the closure of its 145,000-barrel-per-day Benicia refinery in Northern California, which will also result in significant job losses. These closures together account for nearly 20% of California’s gasoline supply, raising concerns about the state’s energy security and the potential for higher gasoline prices in the coming years.
The decision to shut down the Phillips 66 refinery is largely driven by the changing regulatory environment in California. The state has long been at the forefront of pushing for cleaner air standards and stricter emissions regulations, and this has placed increasing pressure on traditional refineries to meet new operational guidelines. Additionally, the shift toward electric vehicles and renewable energy sources is gradually reducing the demand for gasoline, prompting companies like Phillips 66 to reevaluate their investments in fossil fuel infrastructure.
For workers and contractors at the refinery, the announcement of impending layoffs has been met with mixed emotions. While some have expressed understanding of the company’s decision due to the larger economic and environmental factors at play, others are concerned about finding new employment opportunities in the evolving energy sector. The United Steelworkers Union has been vocal in its calls for job protection and better transition programs for workers affected by the closure.
As California continues to transition to a cleaner energy economy, the impact on its workforce and the state’s overall energy infrastructure will be felt in the coming years. While some workers may find new roles in the renewable energy sector, the shift away from fossil fuel dependence will require significant investment in training and education programs to ensure a just transition for those affected by job losses in traditional industries like oil refining.
Phillips 66 has not yet disclosed its future plans for the site, raising questions about potential redevelopment. The land, located in a prime location near the Port of Los Angeles, could be repurposed for new industries, but how it will be used remains uncertain. In the meantime, the immediate priority for the company will be managing the transition for its employees and mitigating the economic effects of the closure.
The ongoing trend of refinery closures in California is a reminder of the complex balancing act between environmental regulation, economic stability, and energy security. As the state grapples with these challenges, the broader implications for the energy industry, workers, and consumers are likely to play out over the next several years.