On June 8, Bernard Looney, CEO of BP said that the three-month redundancy freeze that was introduced in March to “ease some of the immediate worriying for people,” is ending.
The result of that move is that 10,000 will be laid off, most by the end of the year.
Those in office jobs will be affected the most. On the webcast announcing these measures, he cites the example of the company’s new Tier 2 structure which “has more than halved the number of most senior-level jobs – and we are looking to reduce the number of group leaders overall by around one third.”
“Everyone on the BP leadership team realizes these decisions will mean significant, life-changing consequences for thousands of colleagues and friends,” said Looney in the statement. “And I am really sorry that this will hurt a lot of people who I know love this company as much as I do. “
Looney points to oil prices that are below the level the company needs to make a profit, as the primary cause of the layoffs and other restructuring measures. In the first quarter, the company’s debt rose by $6 billion.
In order to manage costs, the company said it will reduce capital expenditure by 25% this year – which is a reduction of around $3 billion.
And they are decreasing workforce costs by $2.5 billion in 2021. The current cost of the workforce totals $8 billion.
These steps need are need to reinvent the company, according to Looney, “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."
