bp to axe 4,700 jobs and 3,000 contractors

Article by Adam Duckett

Nieuwland Photography / Shutterstock.com

bp is making 4,700 staff redundant – more than 5% of its total workforce – and axing 3,000 contractors as it pushes to cut costs.

The job losses follow a string of disappointing quarterly performances and a pledge last year by CEO Murray Auchincloss to cut at least US$2bn in costs by the end of 2026 to reassure investors.

In a memo seen by Reuters, Auchincloss told staff: “We have got more we need to do through this year, next year and beyond, but we are making strong progress as we position bp to grow as a simpler, more focused, higher-value company.”

The company employs 90,000 staff of which around 11,000 are engineers. bp has declined to provide a breakdown of the types of roles facing cuts. However, Reuters reports that Emeka Emembolu, head of bp's technology division, messaged his team saying he expects around 1,100 roles will be cut through redundancies or by shifting work from the UK and the US to Hungary, India, and Malaysia.

The FT reports that Auchincloss told staff that bp had “stopped or paused 30 projects since June” and intended to expand operations in lower cost countries. Last year, bp announced it would set up a new centre in Pune, India to house its global technical and engineering expertise. It said it would look to expand operations in the city, noting it has a rich talent pool provided by various engineering and technical colleges.

bp’s corporate strategy speaks of the company transforming from an international oil company into an integrated energy company. This involves expanding into lower carbon markets including biofuels and renewables, producing cleaner power to produce hydrogen to decarbonise its refineries and derivatives including ammonia for export.

bp notably broke cover from its oil producing peers in 2020 when it announced plans to reduce its oil and gas output by 40% by 2030 but has faced questions about its scope to generate profits under the strategy. While it remains committed to net zero for its own operations, it has slowed the pace of change and announced plans to increase production.

Shell too has slowed its energy transition plans, selling renewables businesses and scaling back on hydrogen and biofuels projects. The moves follow Russia’s invasion of Ukraine and European concerns about energy security.

bp’s share price is down 5% since Auchincloss took over a year ago. Its rivals, which are targeting higher oil and gas output, have seen their share valuations increase, with Shell up 14% and ExxonMobil up 15%.

Article by Adam Duckett

Editor, The Chemical Engineer

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