BP has unveiled plans to cut nearly 8,000 jobs as part of a big cost-saving drive amid investor pressure to roll back net zero plans.
Chief executive Murray Auchincloss (pictured) told staff yesterday the oil giant would axe 4,700 roles – 5 per cent of its global workforce – and 3,000 contractor positions.
The cuts – part of a plan to save £1.6billion by the end of next year – come as Auchincloss faces intense scrutiny over the energy company’s green strategy.
Shareholders have demanded that the Canadian businessman, who took over from disgraced Bernard Looney last year, scale back his predecessor’s shift to green energy.
Investors want Auchincloss to confirm that BP will abandon some climate targets following reports that the firm had scrapped a previous plan to cut oil and gas output by 40 per cent by 2030.
Cuts: BP Chief exec Murray Auchincloss (pictured) told staff the oil giant would axe 4,700 roles – 5% of its global workforce – and 3,000 contractor positions
He is also reportedly eyeing major investments in the Middle East and the Gulf of Mexico to boost BP’s oil output.
It comes amid concerns that BP has underperformed its London rival Shell and is lagging US peers such as ExxonMobil and Chevron, which have doubled down on fossil fuels.
Auchincloss had been due to shine some light on BP’s strategy at a crucial investor update in New York on February 11.
But in a blow to shareholders, the capital markets day was this week delayed to February 26 and moved to London to allow Auchincloss to recover from surgery.
Yesterday, Auchincloss, 54, told staff the company was ‘uniquely positioned to grow value through the energy transition’, adding: ‘But that doesn’t give us an automatic right to win.
‘We have to keep improving our competitiveness and moving at the pace of our customers and society. That’s what we are doing.’
BP said the job cuts were part of a multi-year plan to make savings across the business, and that there might be more reductions this year and beyond.
Auchincloss said the job losses announced yesterday ‘account for much of the anticipated reduction this year’.
He said the company was ‘focusing resources on our highest-value opportunities’ and that it has stopped or paused 30 projects since June last year.
Auchincloss’s memo said that about 2,600 of the contractors involved in the job cuts have already left the business.
BP has 90,000 staff, 14,000 of whom are in the UK. Of its UK workers, 6,000 work in petrol and service stations and would not be affected by the cuts.
He said: ‘I recognise the uncertainty this brings for everyone whose job may be at risk, and also the effect it can have on colleagues and teams.
We have a range of support available, and please continue to show care for each other, be considerate, and keep putting safety first – especially during times of change.’
Earlier this week BP revealed that lower refining margins would dent fourth quarter profits by up to £246million.
That follows a sharp drop in third quarter profit, which tumbled 30 per cent to £1.8billion – its lowest level since the pandemic.
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
Saxo
Saxo
Get £200 back in trading fees
Trading 212
Trading 212
Free dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
Compare the best investing account for you
