Coronavirus: BP plans to cut 15% of global workforce due to drop in demand

BP has said it plans to cut 15% of its global workforce as a response to the drop in demand for fuel caused by the coronavirus crisis.

Chief executive Bernard Looney first told colleagues in a conference call that the company will cut 10,000 jobs from its current strength of 70,000 employees – most of them by the end of the year.

The company will cut 2,000 jobs in the UK alone but in a follow-up email to staff Mr Looney said most jobs lost will be office-based, “not front-line operation roles”.

The reduction in head count will also involve axing one in three senior level roles from its current 400 group leaders, as well as freezing pay for those that remain for the rest of the year.

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. But we must do the right thing for BP and this is that right thing.”

Mr Looney, who took over as chief executive in February, said the company will reinstate annual pay rises to its junior and mid-graded staff from October.

5,000 of BP’s retail staff in the UK will also see an 5% average increase in wages as it introduces “Real Living Wage” across the country.

He added: “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.”

The entire oil sector has faced intense pressure since nationwide lockdowns around the world caused a steep drop in demand for oil, sending prices into negative territory for the first time in its history.

The FTSE100 company said it will reduce wage bills by more than $2.5bn by 2021 — as it was currently spending $8bn annually on its workforce. It will also reduce its capital expenditure by 25%, or £3bn in 2020.

In February, the new chief executive set out a plan to “reinvent” the oil company within a new global energy system to help tackle climate change. BP had said the strategy included a goal of becoming net carbon zero by 2050, if not before.

Mr Looney added: “To me, the broader economic picture and our own financial position just reaffirm the need to reinvent BP.

“While the external environment is driving us to move faster – and perhaps go deeper at this stage than we originally intended – the direction of travel remains the same.”

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