BP Set To Slash 10,000 Jobs: ‘I Can’t Make Your Worries Disappear,’ Says CEO

BP’s CEO Bernard Looney today announced plans for 10,000 layoffs, equating to roughly 15% of the oil supermajor’s global workforce. The move comes after a three-month pause in redundancies out of respect for the stresses caused by the Covid-19 pandemic. “As much as I would love to, I can’t make your worries disappear,” said Looney in a statement. “That moratorium ends today.” 

In planning cuts, BP joins other industry giants like Chevron
CVX
and Halliburton
HAL
, which are cutting some 6,000 workers each, as well as many smaller companies like Marathon Oil
MRO
and Occidental Petroleum
OXY
. So far ExxonMobil
XOM
has avoided layoffs. 

Looney is in the process of overhauling BP’s mangement structure, and had previously announced plans to slash the ranks of top management from 250 to 120. Notable departures include the CEO of BP Americas Susan Dio, one of the highest-ranking women in the industry. Upon her retirement next month Dio will be replaced by David Lawler, CEO of BP’s Denver-based shale-drilling business focused on the Lower 48. CFO Brian Gilvary is also leaving after 34 years with the company. 

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Many layoffs will occur at BP’s U.S. headquarters in Houston, its biggest employee base in the world. Others will come from BP’s Alaska operations — set to be sold to Hilcorp Energy, owned by Houston billionaire Jeff Hildebrand, for $5.6 billion. The companies have renegotiated terms of the deal in light of the oil price collapse. 

“Everyone on the BP leadership team realizes these decisions will mean significant, life-chaning consequences for thousands of colleagues and friends,” said Looney today, indicating that for the first rounds of layoffs BP will ask for volunteers willing to accept redundancy packages. “And I am really sorry that this will hurt a lot of people who I know love this company as much as I do.” 

BP has sold tens of billions of dollars in assets over the past decade since its Deepwater Horizon oil spill in the Gulf of Mexico. This year the company already announced a $3 billion, or 25% reduction in planned capital investment, and Looney in April said that BP intended to reduce its “cash breakeven” oil price to $35 per barrel. Oil is trading at $38/bbl today. So far BP has resisted calls to cut its dividend, as Shell and Oxy have done recently. At $28.20 BP shares are down by a third in the past year and yield 9%. BP produces roughly 2.5 million barrels per day, plus another 1.1 million bpd via its JV with Russian giant Rosneft.

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