BP to cut 10,000 jobs as virus hits demand for oil
BP is set to cut 10,000 jobs amid a global slump in demand for oil because of the coronavirus crisis. The oil conglomerate told staff on 8 June that around 15% will be made redundant by the end of the year.
BP has not disclosed how many jobs will be lost in the UK but it is thought the figure could be close to 2,000.
Chief executive Bernard Looney blamed a drop in the oil price for the cuts. In an email to staff, he said:
“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.”
Since the Covid-19 outbreak caused international lockdown the cost of oil has plummeted. It fell to below $20 a barrel at the peak of the crisis, less than a third of the $66 it cost at the start of the year. It has since partly recovered to around $42 a barrel.
BP employs around 15,000 people in the UK. The firm’s office-based workers are expected to bear the brunt of the redundancies, which will not affect any of its retail staff.
In the email Looney told staff:
“It was always part of the plan to make BP a leaner, faster-moving and lower carbon company. Then the COVID-19 pandemic took hold. You are already aware that, beyond the clear human tragedy, there has been widespread economic fallout, along with consequences for our industry and our company.”
The oil giant plans to get rid of one-third of its 400 senior management roles and freeze pay until at least March next year for those who are kept on. It said the cuts were part of plans for the business to reduce its operating costs by $2.5bn (£1.9bn) in the new financial year, and conceded the measures “will likely have to go even further”.
BP recorded pre-tax losses of £3.6bn in the first quarter of the year, to April 2020.