The CEO of BP, Bernard Looney, has told the oil major’s staff that it is to cut 10,000 jobs, around 15% of the current workforce, as it seeks to cut spending and save money.
Most of the jobs are expected to go by the end of the year, and will likely largely be within office staff. Looney promised that the senior levels of BP would bear the brunt. Redundancies had previously been frozen. In a message to staff that was also posted on LinkedIn, Looney partly blamed the COVID-19 pandemic and the widespread economic fallout.
‘The oil price has plunged well below the level we need to turn a profit. We are spending much, much more than we make – I am talking millions of dollars, every day. And as a result, our net debt rose by US$6bn in the first quarter,’ Looney writes.
However, he also referenced BP’s new strategy, launched in February, to see the company eventually reach net zero carbon.
‘It was always part of the plan to make BP a leaner, faster-moving and lower carbon company. That is how we will deliver on our net zero ambition. And that is how we will seize opportunities throughout the energy transition,’ he writes.
BP’s operating costs amount to US$22bn/y at present, with US$8bn of that spent on staffing costs. In 2021 BP will cut operating costs by US$2.5bn. As well as job cuts, senior level leaders and group leaders will not receive pay rises between now and 31 March 2021, and it is unlikely that any cash bonuses will be paid to staff this year.
Looney pledged that those leaving the company would receive help to find new jobs or retrain, including through webinars, professional coaching and connecting them to agencies and government programmes, as well as ‘substantial severance packages’.
Industry analysts and experts believe that BP will not be last major oil company to resort to such measures as a result of the ongoing COVID-19 pandemic.