BP cuts 10,000 jobs

BP has announced that it will cut 10,000 jobs by the end of the year due to the economic impact of Covid-19.

BP had a three-month redundancy freeze in place during the peak of the pandemic, but this has now been lifted. The number of jobs that will be lost represents around 15% of the global workforce of 70,000 people.

The Covid-19 pandemic has resulted in a collapse of oil prices, which has made the job cuts essential, according to BP CEO Bernard Looney. It is thought that around 2,000 of 15,000 jobs could be lost in the UK, according to The Guardian.

In a letter to employees, Looney 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. 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.”

He said that owing to the economic fallout of the pandemic, BP’s net debt rose by US$6bn in the first quarter of the year. He outlined what the company is doing to save money, including cutting capital expenditure by 25%, freezing promotions, halting pay rises for senior management up to 31 March 2021, and not paying bonuses this year.

However, BP is still paying its shareholders a dividend for the first quarter of the year which amounts to a total of US$2.1bn, which is an increase of 2.4% compared to last year’s first quarter dividend, according to The Guardian.

Jake Molloy, regional officer at the RMT union, told The Guardian “It’s absolutely galling and appalling that just a few weeks ago we see billions handed out in shareholder dividends, and now they are cutting 10,000 jobs. BP’s actions today demonstrate what BP is about – money for shareholders and no care for staff.”

Deirdre Michie, Chief Executive of trade association OGUK, said: “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.”