BP plan to lay off 10,000 workers revealed
BP plans to lay off nearly 10,000 workers globally by the end of the year as it responds to the oil crash following a self-imposed 90-day moratorium on job cuts.
The U.K.-based oil major on Monday ended its three-month freeze and said it would start a process to shed thousands of jobs, most of which will be officebased. The company said it plans to protect its rig workers, and prioritize safe and reliable operations.
BP has 70,100 employees around the world, including 4,000 in the Houston area, according to a Houston Chronicle survey. Houston is home to BP’s U.S. headquarters and its largest employee base. CEO Bernard Looney in March promised workers that their jobs would be safe for 90 days.
“Everyone on the BP leadership team realizes these decisions will mean significant, life-changing consequences for thousands of colleagues and friends,” Looney said in a statement Monday. “And I am really sorry that this will hurt a lot of people who I know love this company as much as I do.”
Oil and gas companies for
months have been cutting costs in response to the sudden and historic oil price collapse driven by the coronavirus pandemic, which slashed demand for petroleum products like gasoline, diesel and jet fuel. The industry shed a record 26,300 jobs in Texas during April, according to the latest figures from the Texas Workforce Commission.
Chevron last month said it plans to lay off up to 15 percent, about 6,750, of its 45,000 employees globally. The Californiabased oil major employs about 7,000 in Houston, according to a Chronicle survey. Oil-field service company Halliburton last month laid off 1,000 at its Houston headquarters.
Mining, which includes oil and gas drilling, lost 20,000 jobs in May, according to the Bureau of Labor Statistics, and 77,000 over the past three months.
BP said the price of crude, which declined slightly to $38.19 Monday, is “well below” the level it needs to turn a profit, and that the company is spending “much, much more than we make.” As a result, the company is reducing capital spending by $3 billion, and reducing operating costs by $2.5 billion. It costs around $22 billion a year to run the company, of which $8 billion is related to labor costs, the company said.
The layoffs at BP will affect senior level jobs the most. The company said it plans to reduce the number of group leaders by a third, and will begin offering buyouts this month. Employees can request buyouts starting June 15.
In addition, BP said it is unlikely the company will be able to pay annual cash bonuses to employees this year, but will lift its freeze on promotions and pay raises for some employees. There will be no pay raises for senior executives and group leaders until at least March 31, 2021.
Looney said it was always BP’s plan to become a “leaner, fastermoving and lower carbon company.” The oil crash just forced the company to move more quickly, he said.
“These are tough decisions to make. But the impact — particularly on those leaving us — is much, much tougher. I understand this, and I am sorry,” Looney said. “But we must do the right thing for BP and this is that right thing. It will help strengthen our finances. And it will help create a leaner, faster-moving and more competitive company for the majority who are staying.”
Shares of BP tumbled early Monday on the New York Stock Exchange but recovered to close up 67 cents, or 2.4 percent, at $28.38.