BP cuts 10,000 jobs worldwide amid sluggish demand for oil | Business

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BP has announced plans to cut 10,000 jobs, which represents about 15 percent of the oil company’s 70,000 employees by the end of the year.Bernard Looney, CEO of BP, told employees that the job cuts were essential for the company to cope with a global collapse in demand for oil due to the coronavirus pandemic. He said that BP had to reinvent itself and get out of the crisis a “leaner, faster and more low-carbon business”.

The London-based group has not said how many jobs will be lost in the UK, but it is believed the figure could be close to 2000. About 15,000 people work for BP in the UK.

“You already know that beyond the obvious human tragedy, there have been widespread economic spinoffs, as well as consequences for our industry and our business,” Looney told staff in a nationwide email. the business on Monday. “The price of oil has plunged well below the level we need to make a profit. We spend much more than we earn – I am talking about millions of dollars every day. And as a result, our net debt increased by $ 6 billion [£4.66bn] in the first quarter. “






Bernard Looney: “The price of oil has fallen well below the level we need to make a profit.” Photography: Toby Melville / Reuters

Looney, who took over the general management of BP, 111, in February, said: “We are now going to start a process that will see nearly 10,000 people leave BP – most by the end of this year. The majority of those affected will work in office jobs. We protect the front line of the business and, as always, prioritize safe and reliable operations. ”

He said the highest levels of BP would have the greatest impact and the number of group leaders would be cut by a third.

BP did not reduce its dividend payments to shareholders in the aftermath of the pandemic, although some analysts said its current payments were unsustainable. In April, it announced that it would pay shareholders $ 2.1 billion. The first quarter dividend of 10.5 cents per share increased 2.4% from the previous quarter.

Its main British rival, Royal Dutch Shell, reduced its interim dividend by 66% to 16 cents.

Jake Molloy, regional manager of RMT, said the layoffs were a “devastating disaster” for BP staff, and that it was “absolutely exasperating” to see the company cut so many jobs within weeks only after announcing the huge shareholder payment.

“It is absolutely infuriating and appalling that just a few weeks ago billions of dividends were distributed to shareholders, and now they are cutting 10,000 jobs,” Molloy told the Guardian. “Something has to be done about it. It’s a terrible way to treat staff. ”

He called on the government to intervene and prevent companies from laying off large numbers of people if they refused to cut their dividends. “BP’s actions today demonstrate what BP is – money for shareholders and no care for staff. ”

He said the government should speed up the transition to green energy and invest in retraining oil workers for future energy technologies. “All the work planned for the future must be done now. The industry is on its knees right now.

Remember that these companies operate our [the country’s] natural resources, and we, as a society, should see a return, rather than letting companies fill the pockets of shareholders. ”

Looney said he would ban any salary increases for executives until at least March 2021. He said the bonuses were “very unlikely this year” and warned staff not to factor the bonuses into his personal finance planning.

World demand for oil has dropped to its lowest level in 25 years after the advent of Covid-19, which severely limited demand for transportation fuels, causing world oil prices to fall by two-thirds. The oil market crisis has wiped out billions of dollars from major oil companies, including BP which posted a loss for the first quarter of this year.

Brent crude oil prices started the year at around $ 65 a barrel, but dropped to $ 16 in April when the pandemic set in. It has since recovered at around $ 40 a barrel.

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Looney told the Guardian last month that he was “more convinced than ever” that BP should embrace the energy transition after the collapse of global oil markets. “I am more convinced than ever that it is the right thing to do and we must tackle it,” he said. “The pandemic only adds to the challenge that already exists for oil in the medium and long term.”

BP shares rose 1% on Monday to 370p. The shares, which were worth around 500p in January, fell to 233p in March.

Chevron, the second largest US oil producer after Exxon, said it would cut its global workforce by 10% to 15% as part of an ongoing restructuring.

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