BP Announces 10,000 Layoffs

In a message to employees Monday, BP CEO Bernard Looney announced that the London-based oil major will be reducing its headcount by about 10,000 people over the span of 2020. The reduction amounts to a 14 percent reduction for BP, and the firm said that the cuts will be concentrated in its white-collar ranks. 

The COVID-19 outbreak and the associated government response measures have sharply curtailed demand for oil, sending the price per barrel below sustainable levels for many producers. Amidst plummeting revenue, BP said that it has to cut back in order to balance its budget. It previously said that it intends to reduce capital expenditures by 25 percent this year, and Looney said Monday that the firm may well go further. "The oil price has plunged well below the level we need to turn a profit," Looney wrote. "We are spending much, much more than we make - I am talking millions of dollars, every day."

Chevron announced similar budget-driven cuts in May, but BP says that the staff reductions may actually be instrumental for its long-term growth plans. BP has long positioned itself as a leader in the transition from fossil fuels to low- and no-carbon enegy sources, and Looney said Monday that the layoffs would accelerate that change. 

"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," Looney wrote.

In February, Looney said that BP aims to achieve net zero emissions - including the emissions created by the combustion of its products - by the year 2050. "We need a rapid transition to net zero. We all want energy that is reliable and affordable, but that is no longer enough," Looney said.