Coronavirus: BP plans to cut 15% of global workforce due to declining demand ‘ Business News

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BP said it plans to reduce its global workforce by 15% in response to the drop in fuel demand caused by the coronavirus crisis.

Chief Executive Officer Bernard Looney first told his colleagues on a conference call that the company will cut 10,000 jobs with its current 70,000 employees, most of them by the end of the year.

The company will cut 2,000 jobs in the UK alone, but in a follow-up email to staff Mr Looney said most of the jobs lost will be office-based, “not front-line operating roles.”

Reducing the number of heads means hatching a higher-level role on three of its current 400 group leaders, as well as freezing wages for those who remain for the rest of the year.

He said: “These are difficult decisions to make. But the impact – especially on those who leave us – is much, much more difficult.

“I understand that and I’m sorry. But we have to do the right thing for BP and that’s what it takes.

Looney, who took over in February, said the company will reinstate annual salary increases for its junior and third-year staff starting in October.

He added: “This will help strengthen our finances. And it will help create a lighter, faster and more competitive business for the majority of people who remain.

The oil sector as a whole has faced intense pressure since domestic blockades around the world caused a sharp drop in oil demand, sending prices into negative territory for the first time in its history.

FTSE100 said it will cut payroll bills by more than $2.5 billion by 2021 – as it is currently spending $8 billion a year on its workforce. It will also cut capital spending by 25%, or EUR 3 billion in 2020.

In February, the new CEO laid out a plan to “reinvent” the oil company within a new global energy system to help fight climate change. BP said the strategy included a goal of becoming net zero carbon by 2050, if not before.

Mr Looney added: “For me, the broader economic picture and our own financial position reaffirm the need to reinvent BP.

“Although the external environment pushes us to go faster – and perhaps to go further at this stage than originally planned – the direction of the trip remains the same.”

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