BP Embarks on Major Restructuring Effort, Cutting Thousands of Jobs
In a bid to streamline its operations and reduce costs, UK energy giant BP has announced plans to cut over 5% of its global workforce, affecting around 4,700 employees and 3,000 contractor positions. This move is part of the company’s strategy to transition away from its oil and gas business and focus on more sustainable operations.
Simplifying the Business
BP’s chief executive, Murray Auchincloss, has been driving the company’s transformation efforts since last year, aiming to simplify the business and increase investments in renewable energy. The company wants to support more digitization of its operations and leverage artificial intelligence in marketing and engineering.
Job Cuts and Restructuring
The job cuts, announced on January 16, will impact various countries across BP’s operations, although the exact breakdown by region has not been disclosed. About 2,600 contractor positions have already been eliminated, and the company is expected to provide more details on the restructuring plan during its investor day on February 26.
Cost-Cutting Targets
BP has set a target to reduce costs by around $2 billion by the end of next year, with a goal of saving at least $500 million this year. The company’s focus on high-value opportunities has led to the pause or stoppage of at least 30 projects since June last year.
Investor Concerns
Investors have been wary of BP’s plans to reduce its oil and gas production by 2030, which has led to a revision of the company’s emissions reduction target from 40% to 20-30%. Despite this, Auchincloss remains confident that BP is uniquely positioned to grow value through the energy transition to renewables.
Technology Division Cuts
A separate memo from Emeka Emembolu, leader of BP’s technology division, revealed that around 1,100 jobs would be cut by eliminating redundant positions and shifting work from the UK and the US to India, Malaysia, and Hungary.
Investor Event Postponed
The announcement of job cuts comes just days after BP delayed an investor event, which was originally scheduled for February 11 in New York City. The event has been rescheduled for February 26 in London, allowing Auchincloss to recover from a medical procedure.
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