U.K.-based oil company BP is cutting 4,700 jobs worldwide, in addition to 3,000 contractor roles, as part of a cost-saving initiative. CEO Murray Auchincloss announced the job losses in an email to employees, stating they account for a significant portion of the anticipated reductions for the year.
BP cuts 4,700 jobs worldwide as part of cost-saving plan
The planned reductions represent just over 5% of BP’s 90,000 global workforce. Auchincloss indicated that approximately 2,600 of the contractors affected by the cuts have already left the company. Last October, BP identified $500 million in cost savings for the year, part of a broader plan to achieve $2 billion in savings by the end of 2026.
Auchincloss said the company is focusing its resources on high-value opportunities and has halted or paused 30 projects since June. The cuts coincide with BP’s effort to integrate more digital capabilities, utilizing artificial intelligence in its engineering and marketing operations.
In April, Auchincloss outlined the $2 billion cost-reduction plan aimed at revitalizing the company’s declining share price, which has decreased approximately 20% since spring 2023. BP has also decreased its involvement in several renewable energy projects and reportedly abandoned a prior commitment to reduce oil and gas output by 40% by 2030.
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Despite the cuts, Auchincloss reaffirmed BP’s potential to create value amid the energy transition, stating the need to enhance competitiveness and respond to customer and societal demands. Recently, BP postponed an investor event originally scheduled for New York to allow Auchincloss to recuperate from a medical procedure.
The company has communicated that it undertook a multi-year program to simplify and focus its operations. A spokesperson noted that the workforce had increased significantly following various acquisitions, but declined to specify how the job cuts would be distributed across its global businesses, which include the United States.
Following the announcement of job cuts, BP’s shares rose over 1% in London. The stock had previously fallen nearly 16% in 2024 as Auchincloss aimed to address investor concerns regarding the company’s energy transition strategy.
BP’s recent decisions may influence oil prices in several ways. Its withdrawal from certain projects and the abandonment of the oil and gas reduction goal suggests a strategy to maintain or potentially increase traditional fossil fuel production. This, coupled with reduced renewable energy investments, could sustain oil supply, leading to higher prices if global demand rises or supply tightens.
The emphasis on operational efficiency and cost-cutting measures could enhance investor confidence, as reflected by the rise in BP’s stock price. Conversely, BP’s initiatives to incorporate digital technology and artificial intelligence may lower production costs and boost efficiency, potentially rising supply and exerting downward pressure on prices. The recent halt of 30 projects may temporarily reduce BP’s immediate oil and gas operations, but any significant impact on supply would likely depend on trends across other producers.
Featured image credit: BP
