BP Announces Plan To Cut 4,700 Jobs To Reduce Costs

BP Announces Plan to Cut 4,700 Jobs to Reduce Costs.

Oil giant BP has confirmed plans to cut approximately 4,700 jobs, representing more than 5% of its global workforce, as part of a major cost-reduction initiative. The announcement, made on Thursday, marks the latest step in the company’s efforts to streamline operations and achieve a cost-saving target of $2 billion (£1.6 billion) by the end of 2026.

BP, which employs around 90,000 people worldwide, has not disclosed the specific countries where the job cuts will occur. However, the reductions will primarily impact office-based roles, with operational positions largely unaffected.

In addition to staff layoffs, about 3,000 contractor roles will also be eliminated this year. BP’s chief executive, Murray Auchincloss, acknowledged the difficult decisions, stating in an email to employees:

“We have got more we need to do through this year, next year and beyond, but we are making strong progress as we position BP to grow as a simpler, more focused, higher-value company.”

Impact in the UK

In the UK, BP employs roughly 16,000 people, including 6,000 staff at petrol and service stations who will not be affected by the cuts. While the exact number of UK-based roles to be impacted remains unclear, the job losses are part of a broader review of all BP divisions.

Auchincloss also recognized the uncertainty caused by the announcement:

“We understand the uncertainty this brings for everyone whose job may be at risk, and also the effect it can have on colleagues and teams.”

Strategic Focus on Digital Transformation

The job cuts are part of BP’s multi-year plan to save costs across its operations while increasing its focus on digital capabilities. The company is incorporating artificial intelligence into engineering and marketing processes, aiming to boost efficiency and competitiveness.

Since June 2024, BP has paused or halted 30 projects as it refocuses its resources on high-value opportunities.

Controversy Over Climate Commitments

The cost-cutting measures come amid criticism over BP’s revised climate goals. In 2023, the company scaled back its ambitions to cut oil and gas production by 2030, adjusting its emissions reduction target from 35-40% to 20-30%. The decision drew backlash from environmental groups and stakeholders.

Despite the controversy, Auchincloss remains optimistic about BP’s role in the energy transition:

“We are still uniquely positioned to grow value through the energy transition. But that doesn’t give us an automatic right to win. We have to keep improving our competitiveness and moving at the pace of our customers and society.”

Leadership Transition and Share Price Challenges

Auchincloss’s tenure as CEO began following the departure of his predecessor, Bernard Looney, in the wake of a review of Looney’s personal relationships with colleagues. Since taking charge, Auchincloss has aimed to revive BP’s fortunes, including addressing a share price that has fallen about 20% since last spring.

The announcement of job cuts signals BP’s determination to align its operations with its strategic priorities while navigating a challenging energy landscape. Further workforce reductions may be on the horizon as the company continues to adapt to market demands and the global shift toward renewable energy.