BP plans to cut 15% of its workforce as it responds to the COVID-19 pandemic and shifts to renewable energy.
“We will now begin a process that will see close to 10,000 people leaving BP — most by the end of this year,” chief executive officer Bernard Looney said in a statement.
Roughly 20% of the job cuts will be in the United Kingdom, where BP employs 15,000 people. The company employs more than 70,000 people worldwide.
“The majority of people affected will be in office-based jobs. We are protecting the frontline of the company and, as always, prioritizing safe and reliable operations,” Looney said.
The company plans to cut capital expenditures by $3 billion in 2020 and to cut operating expenditures by $2.5 billion by the end of 2021.
Looney said BP would move forward with pay rises for certain employees beginning in October and it would resume promotions “in a measured way” beginning in July, but cash bonuses at the company were “very unlikely this year.”
BP reported $791 million in underlying replacement cost profits for the three months ended March 31, a drop of 66% year-over-year but above consensus estimates. Its net debt rose to $51.4 billion for the quarter.
Looney began as CEO in February and announced plans to dismantle and restructure the company and reinvent BP shortly after. A spokesperson said the COVID-19 crisis “amplified and accelerated” BP’s transition to low-carbon energy.
“To me, the broader economic picture and our own financial position just reaffirm the need to reinvent BP,” Looney said.
“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.”
Other global oil giants have announced job cuts in response to falling prices. Chevron last month said it would cut between 10% and 15% of its global workforce, while Royal Dutch Shell began voluntary redundancies.