North Sea dealt devastating blow as BP axes 10,000 jobs - reaction

Oil major BP is to slash 10,000 jobs from its global workforce, the majority by the end of this year, in a move described by experts as “symptomatic” of the challenges facing the industry.

The group, which currently employs some 70,000 people worldwide, said it could not yet breakdown details of how the cuts would impact specific regions or businesses. Picture: BP

The group, which remains a key North Sea player, said the move would “significantly impact senior levels” of management in the business, with its top leadership roles to be cut by a third. It comes just weeks after BP increased the dividend it will pay out to its shareholders.

In an email to staff, chief executive Bernard Looney said: “We will now begin a process that will see close to 10,000 people leaving BP – most by the end of this year. The majority of people affected will be in office-based jobs.

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“We are protecting the frontline of the company and, as always, prioritising safe and reliable operations.”

The group, which currently employs some 70,000 people worldwide, said it could not yet break down details of how the cuts would impact specific regions or businesses. However, it is thought that as many as 2,000 roles could go in the UK, where BP has key operations in Aberdeen.

OGUK chief executive Deirdre Michie said: “This shows the very real and personal impact of the coronavirus pandemic on jobs and livelihoods while companies are stepping up to deliver the net zero agenda.

“There is a serious risk the UK loses the skills it needs not only to meet existing energy demands from domestic resources, but also to meet the UK’s climate ambitions.

“It underlines the need to continue working with governments to deliver an inclusive, fair, and sustainable transition to a lower carbon future. This is the best way to protect jobs, create new business opportunities and ensure energy regions from the north east of Scotland to the east of England are not left in the dark.”

Professor David Elmes, who leads the global energy research network at Warwick Business School, said: “The job losses at BP are symptomatic of the wider challenges facing the industry.

“Coronavirus has reduced oil demand and the price per barrel has plummeted, but that has happened in a wider context of short-term and long-term decline.

“Some industry forecasts had acknowledged a flattening off in long-term demand last year, before the pandemic began.

“All firms in the sector will all be looking at how they can cut costs, shift their activities to the lowest cost field, trim investment, and thinking hard about what dividend they can pay.”

He added: “BP and the other European-based international companies have already said they will become less focused on oil and gas over time. If this situation continues, there will be intense discussions about what can they do to move faster.”

BP said the cuts were part of plans for the business to reduce its operating costs by $2.5 billion (£1.9bn) for the new financial year, although the cuts “will likely have to go even further”.

Group leaders and senior level leaders will also not be given any pay rises until March 2021 at the earliest, while BP will not pay any cash bonus this year.

The news comes less than two months after the energy giant increased the dividend that it pays to shareholders, despite a major hit from the pandemic.

Looney has set out to considerably transform BP after stepping up to the top job in February. As he replaced American Bob Dudley, Looney promised that the company would be an emissions-neutral business by the middle of the century.

However, his commitment to the challenge of global warming has been questioned by campaign groups. Looney has promised to lay out a detailed road map in September.

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