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Tuesday, June 22, 2021

BP to cut 10,000 jobs as coronavirus hits demand for oil

Faced with the plunge in prices, the British company had already announced, in April, a drastic drop in investment spending and a savings plan.

The oil giant BP has announced that it will cut 10,000 jobs worldwide, or 15% of its workforce, in order to gain efficiency and adapt to an oil market hit by the health crisis. The majority of these job cuts will take place by the end of the year and will mainly concern employees in administrative functions, the group said in a press release.

The hierarchy will not be spared since BP will reduce the number of senior executives by a third, to 400 for the moment. These announcements were made by general manager Bernard Looney at an online conference for BP staff. “These are difficult decisions to make,” said the boss in an email to employees.

“But we have to do what’s good for BP” and “it will help us to be more efficient,” he added. The strategic plan announced in February already planned to form a smaller group in order to ensure a future less dependent on fossil fuels.

A loss of $ 4.4 billion in the first quarter.

But the health crisis changed everything and prompted BP to take drastic action. Oil prices have plunged since March below BP’s breakeven point, faced with demand depressed by the cessation of activity during containment.

Looney says his group spends far more money than it puts into its coffers, in the order of millions of dollars a day. BP had already announced in early April a drastic 25% drop in investment spending and a savings program of 2.5 billion dollars (2.4 billion francs) in 2021, which should even be reinforced.

BP fell $ 4.4 billion in the first quarter due to falling prices. In addition, unlike its competitor Royal Dutch Shell, the group decided to maintain its dividend, thereby depriving itself of financial leeway.

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