BP set to axe 10,000 jobs as virus sparks collapse in oil price
‘Energy jobs working group’
BP is preparing to slash 10,000 jobs following the collapse in oil prices triggered by the coronavirus crisis.
The brutal cuts – which are thought to include 2,000 jobs in the UK – account for around 15 per cent of the oil giant’s global workforce.
In a memo to staff, chief executive Bernard Looney 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 a day.’
Most of the job cuts will be among office workers and senior management, with frontline workers including those on oil rigs largely protected.
The redundancies will be made by the end of the year.
The global Covid-19 pandemic has led to a massive drop in demand for oil from households and businesses as lockdowns have been enforced around the world.
The price of oil plunged 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 rebounded to around $42 a barrel since then.
The rout has hammered oil companies well-accustomed to raking in vast profits.
BP, which employs around 15,000 people in the UK and 70,000 worldwide, slumped to a loss of more than £500million in the first three months of the year.
It is now trying to drastically slash costs to stem these losses.
The oil industry has warned coronavirus could lead to 30,000 job losses in the sector.
Oil and Gas UK chief executive
Deirdre Michie said: ‘This shows the very real and personal impact of the coronavirus pandemic on jobs and livelihoods while companies are stepping up to deliver the net zero agenda.
‘There is a serious risk the UK loses the skills it needs not only to meet existing energy demands from domestic resources, but also to meet the UK’s climate ambitions. It underlines the need to continue working with governments to deliver an inclusive, fair and sustainable transition to a lower carbon future.
‘This is the best way to protect jobs, create new business opportunities and ensure energy regions from the North-East of Scotland to the East of England are not left in the dark.’
The Scottish Government is facing calls to reconvene a jobs task force to help the North Sea oil and gas sector following news of the BP job cuts.
Scottish Labour energy spokesman Lewis Macdonald said the job losses at BP will leave workers ‘extremely anxious’. To help the sector, he urged the Scottish Government to set up a new energy jobs working group.
In a letter to Scottish energy minister Paul Wheelhouse, he recalled the Scottish Government wound up the Energy Jobs Taskforce, which it had established in 2014 when plunging oil prices affected the industry.
The Labour MSP said: ‘A different judgment is required today as the underlying causes of the last downturn have come back with a vengeance and will still be with us after the immediate coronavirus crisis has passed.
‘I ask that you now consider convening a new energy jobs working group, with a remit to address both short-term and long-term employment prospects, to protect existing jobs in the oil and gas sector and to promote an energy transition which deploys workers and skills into new energy sectors over time.’
RMT general secretary Mick Cash said it and other trade unions had been ‘warning the Government for months of the need for an urgent plan to protect offshore jobs and skills from the double whammy of coronavirus and depressed oil prices’. He said an offshore jobs taskforce ‘needs to be appointed immediately’.
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