Daily Management Review

15% Of Its Global Workforce To Be Cut By BP: Reuters


15% Of Its Global Workforce To Be Cut By BP: Reuters
According to a report published by the news agency Reuters, about 15 per cent of its workforce will be laid off by BP because of the economic hit form the novel coronavirus pandemic. This is a part of the plans of the company’s Chief Executive Bernard Looney to shift the focus of the oil and gas major to renewable energy.
10,000 jobs from the current 70,100 will be cut by the London-based company, Looney told employees in a global online call this week.
“We will now begin a process that will see close to 10,000 people leaving BP – most by the end of this year,” Looney said in a statement.
There was news reports published previously about the planned job cuts in the company.
The company said that senior office-based positions and not the front-line operational staff will be affected by the roles. A company spokesman said that about one fifth of the total layoffs will happen for roles in the United Kingdom where the company has total staff strength of about 15,000 people.
Following an unexpected drop in demand for oil because of the outbreak of the novel coronavirus pandemic, BP has cut its 2020 spending plans just like all other major energy companies of the world. A 25 per cent slash on the planned $12 billion spending for this year has already been announced by BP. The company has also said that by the end of 20-21, it will be able to find $2.5 billion in cost savings, most of which will be achieved through the digitalization and integration of its businesses.
The company however needs to reduce costs even further, Looney said on Monday.
There will be no pay hike for senior employees of BP until March of 2021, the company has said and added that cash bonuses this year is also likely not to be paid by it. 
The planned layoffs are also touted to be part of the plans of e 111 year old company to become leaner and thus more nimble as the company shifts from oil and gas to cleaner energy business.
“It was always part of the plan to make BP a leaner, faster-moving and lower-carbon company,” Looney said.
The coronavirus crisis “amplified and accelerated” BP’s transition plans, the spokesman said.
A large round of appointments to senior management positions was announced last month by Looney which effectively reduced the size of BP’s leadership team by 50 per cent according to the plan to reorganize the structure of the company. 
Creation of 11 divisions to “reinvent” BP was announced by Looney soon after he was appointed as the CEO in February. The company also announced the dismantling of its traditional structure which was dominated by the oil and gas production business and the refining, marketing and trading division of the company.

Planned job cuts of between 10 per cent and 15 per cent of its global workforce was announced last month by Chevron Corp, the second-largest U.S. oil producer as the company implements a restructuring plan. 
A voluntary redundancy programme has also been initiated by Royal Dutch Shell.