BP Will Axe 10,000 Jobs In Response To Coronavirus Downturn

Oil and gas major BP will cut 10, 000 jobs in response to the coronavirus or Covid-19 downturn and its internal transition plan to a carbon neutral business, the company confirmed on Monday (June 8).

In 2019, BP’s total workforce stood at 70,100 which implies the job reduction amounts to a 15% headcount cut. A fifth, or 2000, of those jobs are expected to be cut in the major’s home base – the UK.

In a statement, Chief Executive Bernard Looney said: “We will now begin a process that will see close to 10,000 people leaving BP – most by the end of this year. It was always part of the plan to make BP a leaner, faster-moving and lower-carbon company.”

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BP said the affected roles will largely be office-based senior management positions and not front-line operational staff. The company also said it would find headline cost savings of $2.5 billion by the end of 2021 through integration, digitalization and process optimization of its various business segments; a drive that is already underway.

The move follows April’s announcement of a 25% reduction in 2020 spending after the Covid-19 pandemic hammered oil demand and briefly sent oil prices into negative territory. In line with the macroeconomic climate, BP also posted a 67% slump in quarterly profits but opted to maintain its dividend to shareholders.

In February, CEO Looney said that he would be creating 11 divisions to “reinvent” BP and do away with its traditional structure dominated by its oil and gas production business and refining, marketing and trading divisions. The ambition, he added, is to make BP a “net zero” carbon company by 2050 or sooner.

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The job cuts are in line with similar reductions by other oil and gas companies. BP’s UK rival oil major Royal Dutch Shell has an ongoing voluntary redundancy program, while stateside Chevron
CVX
is expected to cut its workforce by a similar level.

Oilfield service firms such as Halliburton
HAL
are also exploring headcount reductions along with their service sector peers, as the industry attempts to get to grips with the changing operating climate.