Invezz.com –
British multinational oil and gas company BP (LON:) announced on Thursday that it would reduce its workforce by thousands as part of a significant cost-cutting initiative.
The company aims to streamline its operations and reduce expenses in response to challenging market conditions and the ongoing transition towards cleaner energy sources.
BP’s said:
Today, we have told staff across BP that the proposed changes that have been announced to date are expected to impact around 4700 BP roles – these account for much of the anticipated reduction this year.
The company said that it would also reduce its contractor number by 3,000.
BP has announced a series of cost-cutting measures, including a reduction of its global workforce significantly.
BP’s cash savings goal
This move comes after BP CEO Murray Auchincloss stated last year that the company aims to achieve at least $2 billion in cash savings by the end of 2026. The workforce reduction is expected to contribute significantly towards this goal.
Currently, BP employs around 87,800 people worldwide.
The job cuts represent a significant portion of the company’s workforce.
The company has not yet provided details on which areas or departments will be most affected by the layoffs.
However, it is likely that the cuts will be spread across various parts of the organization.
The cost-cutting measures are part of BP’s broader strategy to adapt to the changing energy landscape.
The company is facing pressure from investors to improve its financial performance amid a challenging environment for the oil and gas industry.
The COVID-19 pandemic has also had a significant impact on the industry, leading to lower demand for oil and gas.
Despite the challenges, BP’s shares traded 1.4% higher on Thursday morning following the announcement of the cost-cutting measures.
This suggests that investors view the measures as a positive step towards improving the company’s financial health.
BP’s recent underperformance compared to its European rivals has led to questions from energy market participants about the firm’s investment strategies.
BP’s weaker refinery margins
In a trading update on Tuesday, BP announced that weaker refinery margins and turnaround activity will impact its fourth-quarter profit by $100 million to $300 million.
The company also expects further declines in oil production.
BP’s quarterly and full-year earnings are scheduled to be reported on February 11, 2025.
In the same update, BP had also announced the postponement of an investor event next month to allow CEO Bernard Looney to fully recover from a planned medical procedure.
Looney is reportedly recovering well from the procedure, which had not been previously disclosed.
The capital markets event was originally scheduled for February 11 in New York but has now been moved to London on February 26, 2025.
