BP announces 10,000 job losses after coronavirus cuts demand for oil
8 June 2020, 15:54
BP has announced plans to cut 10,000 jobs from its global workforce after oil prices took a major hit from the coronavirus crisis.
The oil giant had put redundancies on hold during the pandemic but told staff on Monday that around 15 per cent would be laid off by the end of the year.
The firm's office-based workers are expected to be hit hardest by the redundancies but all of its retail staff are set to stay employed.
The company, which employs 70,000 people globally - 15,000 of which are in the UK - said the move will “significantly impact senior levels” of management in the business, with its top leadership roles to be cut by a third.
BP said the cuts are part of plans for the business to cut its operating costs by 2.5 billion dollars (£1.9 billion) for new financial year, although the cuts “will likely have to go even further”.
In an email to staff, BP 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.
“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.”
He added: “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 six billion US dollars (£4.7 billion) in the first quarter.”
Group leaders and senior level leaders, who will be worst hit by the cuts, will also not be given any pay rises until March 2021 at the earliest, while BP will not pay any cash bonus this year.
Oil prices have slumped as a result of millions across the world being forced to stay at home during lockdowns. As a result, the cost of oil fell to less than $20 a barrel at the peak of the crisis, less than a third of the $66 it cost at the start of the year.
But it has since partly recovered to around $42 a barrel.