Houston’s oil and gas industry is projected to eliminate several thousand jobs in 2026 as lower crude prices slow drilling and push companies to reduce costs, according to a new outlook from the Greater Houston Partnership (GHP).
In its latest employment forecast, the Partnership estimates that upstream oil and gas firms will cut about 3,200 positions next year. The report ties the expected decline to lower projected prices for West Texas Intermediate (WTI) crude, which are likely to compress profit margins and trigger new rounds of cost controls across exploration and production companies.
Industries that depend heavily on energy activity are also expected to contract. The GHP projects that manufacturing will lose about 3,400 jobs, while administrative and support services—many of which are connected to oil field operations and related services—could shed roughly 7,500 positions.
The forecast describes one of the steeper pullbacks for Houston’s energy sector in recent years and notes that the anticipated job cuts stand in contrast to broader growth in the region’s labor market.
Despite the declines in oil, gas and related fields, the Houston area overall is still expected to add about 30,900 net jobs in 2026, pushing total employment to a record 3.5 million by the end of the year. According to the GHP, nearly half of those gains—around 14,000 jobs—will likely come from health care and social assistance.
The report attributes the strength in health care hiring to sustained population growth, a higher number of insured residents and an aging population that increases demand for medical and support services. Other sectors projected to add jobs include construction, public education, public administration and professional and technical services.
The Partnership notes that the shift marks a significant development for the Houston economy, where the oil and gas industry has historically served as the primary source of job creation and investment.
Energy producers, the report says, are dealing with narrower margins and reduced cash flow as crude prices soften. That environment is reinforcing a focus on capital discipline and operating efficiency, which often leads to smaller workforces even when companies remain profitable.
At the same time, the GHP points to several indicators that Houston’s broader economic foundation remains solid. Corporate investments from firms such as Eli Lilly, Foxconn and Inventec continue to move into the region, diversifying the local industrial base. The metro area also added nearly 200,000 residents in 2024, supporting continued demand for housing, health care, retail and other services.
Taken together, the forecast concludes that Houston’s job market is likely to keep growing in 2026, but with more of that growth coming from health care, services and other non-energy sectors rather than from oil and gas.
