BP to cut 10,000 jobs as impact of coronavirus hits

BP has said it plans to cut 15% of its global workforce as a response to the drop in demand for fuel caused by the coronavirus crisis.

Chief executive Bernard Looney first told colleagues in a conference call that the company will cut 10,000 jobs from its current strength of 70,000 employees - most of them by the end of the year.

The company will cut 2,000 jobs in the UK alone but in a follow-up email to staff Mr Looney said most jobs lost will be office-based, "not front-line operation roles".

The reduction in head count will also involve axing one in three senior level roles from its current 400 group leaders, as well as freezing pay for those that remain for the rest of the year.

He said: "These are tough decisions to make. But the impact - particularly on those leaving us - is much, much tougher.

"I understand this and I am sorry. But we must do the right thing for BP and this is that right thing."

Mr Looney, who took over as chief executive in February, said the company will reinstate annual pay rises to its junior and mid-graded staff from October.

5,000 of BP's retail staff in the UK will also see an 5% average increase in wages as it introduces "Real Living Wage" across the country.

He added: "It will help strengthen our finances. And it will help create a leaner, faster-moving and more competitive company for the majority who are staying."

The entire oil sector has faced intense pressure since nationwide lockdowns around the world caused a steep drop in demand for oil, sending prices into negative territory for the first time in its history.

The FTSE100 company said it will reduce wage bills by more than $2.5bn by 2021 -- as it was currently spending $8bn annually on its workforce. It will also reduce its capital expenditure by 25%, or £3bn in 2020.

In February, the new chief executive set out a plan to "reinvent" the oil company within a new global energy system to help tackle climate change. BP had said the strategy included a goal of becoming net carbon zero by 2050, if not before.

Mr Looney added: "To me, the broader economic picture and our own financial position just reaffirm the need to reinvent BP.

"While the external environment is driving us to move faster - and perhaps go deeper at this stage than we originally intended - the direction of travel remains the same."

Offshore union RMT has hit out at the move.

Mike Cash, general secretary, said: "RMT and the offshore unions have been warning the government for months of the need for an urgent plan to protect offshore jobs and skills from the double whammy of coronavirus and depressed oil prices.

"An offshore jobs taskforce needs to be appointed immediately, including the trade unions to prevent this catastrophic loss of jobs and skills to the national economy. 

"Offshore workers will not be made to pay for successive government's failure to tax and regulate North Sea oil and gas companies in a sustainable manner. Policies must be adopted, and quickly to secure a just transition to a net zero carbon economy."

Deirdre Michie, chief executive of industry body Oil and Gas UK, 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."