BP to slash jobs after huge losses

OIL giant BP is to cut 10,000 jobs worldwide as it struggles to “reinvent itself” in the wake of the corona crisis and falling demand. The loss represents about 15 per cent of the group’s 70,000 staff.

Bernard Looney, BP’s chief executive, told employees that the job cuts were essential to enable the company to cope with a global collapse in demand for oil owing to the coronavirus pandemic. He said BP must reinvent itself and emerge from the crisis a “leaner, fastermoving and lower carbon company.”

The London-headquartered group has not said how many jobs will be lost in the UK, but it is thought the figure could be close to 2,000. About 15,000 people work for BP in the UK.

“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,” Looney told staff in a company-wide email on Monday.

“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. And as a result, our net debt rose by 6bn dollars [£4.66bn] in the first quarter.”

Looney, who took over as chief executive of 111-year-old BP in February, said: “We will now begin a process that will see close to 10,000 people leaving BP — most by the end of this year. The majority of people affected will be in office-based jobs. We are protecting the frontline of the company and, as always, prioritising safe and reliable operations.”

He said the most senior levels of BP would bear the biggest impact, and the number of group leaders would be cut by a third.

BP has not cut its dividend payout to shareholders in the wake of the pandemic, even though some analysts have said its current payouts are unsustainable. In April it announced it would pay out 2.1bn dollars to shareholders. The firstquarter dividend of 10.5 cents per share was up 2.4 per cent on the previous quarter.

Its main UK rival Royal Dutch Shell, meanwhile, cut its interim dividend by 66 per cent to 16 cents. Jake Molloy, regional officer at the RMT union, said the job cuts were a “devastating disaster” for BP’s staff.

“It’s absolutely galling and appalling that just a few weeks ago we see billions handed out in shareholder dividends, and now they are cutting 10,000 jobs,” Molloy told the Guardian. “Something needs to be done about this. It’s a terrible way to treat staff.”

Looney said he was banning any pay rises for senior staff until at least March 2021. He said bonuses were “very unlikely this year”, and warned staff not to factor in any bonuses in their personal financial planning.