BP will cut 10,000 jobs as coronavirus hits the UK oil major’s finances and accelerates a strategic shift to become a “leaner” company under its new chief executive.
The pandemic has dealt a large blow to oil demand and BP’s earnings, with widespread financial damage across the energy industry forcing companies to reduce spending, raise debt and make savings.
Bernard Looney who took the helm at BP in February, said in a letter to staff on Monday that "we are spending much, much more than we make."
A three-month redundancy freeze introduced in March has been lifted. BP aims to cut almost 15 per cent of its roughly 70,000-strong workforce by the end of this year. “The majority of people affected will be in office-based jobs. We are protecting the front line of the company and, as always, prioritising safe and reliable operations,” said Looney.
“It will help strengthen our finances,” he added. “And it will help create a leaner, faster-moving and more competitive company for the majority who are staying.”
The latest announcement follows one last month on halving the number of top managers at BP, with many of those leaving the company having held leadership positions under former chief Bob Dudley.
BP has kept its dividend intact but has said it will review its payout policy each quarter. Analysts have said its current distributions are unsustainable with BP’s debt levels among the highest in the sector.
Looney said BP would not give senior employees pay rises until March 2021, and that it was unlikely to pay any cash bonuses this year.