BP to cut 10,000 jobs amid shift to renewables
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BP is preparing to axe approximately 15 per cent of its workforce, under pressure from the coronavirus pandemic. It is hoped that the move will also put the company in a better position to pivot to focus on renewable energy sources.
Sources confirmed to Reuters that CEO Bernard Looney told employees in a global call that 10,000 out of 70,100 jobs would be cut, mostly by the end of this year. The cuts are motivated by a shift from fossil fuels to renewable energy sources and the pressures exerted on the business by the coronavirus pandemic.
Looney reportedly confirmed the cuts in a company-wide email circulated after the call, seen by City AM.
“We will now begin a process that will see close to 10,000 people leaving BP – most by the end of the year. The majority of people affected will be in office-based jobs. We are protecting the frontline of the company and - as always - prioritising safe and reliable operations.”
Other than office-based jobs primarily being affected, it is not yet clear where the cuts will be made and how many engineers will be affected. It is also unclear whether further job cuts will be coming in 2021.
The cuts follow a planned 25 per cent drop (equivalent to $3bn (£2.4bn)) in spending this year, announced in April as the demand for oil dropped to unprecedented lows amid a global stock market crash triggered by the Covid-19 pandemic and an ongoing oil price war between Russia and Saudi Arabia. The price of a barrel of oil briefly dropped to negative figures in April. Looney has indicated that this is causing BP to spend far more money than it makes (“millions of dollars, every day”).
Looney is reportedly planning to shift the petroleum giant from oil and gas to renewable energy with a target to become a net zero company - by 2050 at the latest - through an ambitious programme to gradually divest from oil and gas and pour funding into non-oil and gas businesses.
The planned job cuts – which come after Looney slashed the size of the leadership team from 250 to 120 people – could arguably put BP in a better position to reinvent itself as a green company. Looney announced soon after taking office in February that he would “reinvent” BP by dismantling the historic structure dominated by petroleum.
Looney wrote in the company-wide email: “It was always part of the plan to make BP a leaner, faster-moving and lower-carbon company. This is how we will deliver on our net-zero ambition and that is how we will seize opportunities throughout the energy transition.”
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