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BP plans to reduce costs by eliminating 4,700 employee positions and 3,000 contractor roles.
Insight Out
17 Jan 2025

BP plans to reduce costs by eliminating 4,700 employee positions and 3,000 contractor roles.

BP is reducing its workforce by 4,700 positions, which is about 5% of its total staff, along with cutting more than 3,000 contractor jobs. This decision was shared with employees by CEO Murray Auchincloss on January 16 as part of the company’s ongoing efforts to cut costs.

Additional cost-saving measures are planned for the near future, with the company having already paused or stopped 30 projects since June to concentrate on the most profitable ones. A key aspect of this strategy is a push toward digitization, including the use of artificial intelligence in various departments.


During Mr. Auchincloss' tenure as CEO, BP has fallen further behind its peers in the oil industry and is now valued at less than half of Shell’s worth. Some companies that were once much smaller than BP have now surpassed it.

In response to this underperformance, investors are demanding change. It is anticipated that Mr. Auchincloss will announce a shift back to focusing on oil and gas in February, although there are concerns about whether this can be achieved swiftly enough.

The announcement of job cuts came just days after BP revealed it would postpone its strategy update, originally set for February, and move the event from New York to London to give Mr. Auchincloss additional time to recover from a medical procedure.

In an email to employees, which was also shared with Bloomberg, he acknowledged the uncertainty and the potential impact of the decision on those whose jobs might be affected, as well as the wider effect on colleagues and teams.

"We still have much work ahead of us this year, next year, and beyond, but we are making substantial progress in positioning BP as a simpler, more focused, and higher-value company," the CEO remarked.


BP's recent decline reflects strategic missteps that extend beyond Mr. Auchincloss’ time as permanent CEO. His predecessor, Bernard Looney, invested in low-carbon energy, mistakenly predicted that global oil consumption had peaked, and pursued costly offshore wind initiatives — only to be dismissed for personal reasons before his strategy could fully unfold.


Since then, BP has been gradually dialing back Looney’s strategy. The company slowed its planned reduction of oil and gas output in February 2023, paused or halted several clean hydrogen projects, and announced in December the spin-off of its offshore wind business.


Despite this, BP has been cautious about making a more decisive shift back to fossil fuels, despite demands from some investors.


The company has repeatedly reassured shareholders that it has ample untapped resources to meet its production goals, but since 2020, it has greenlit just one major oil project — the Kaskida field in the Gulf of Mexico.


This prolonged period of underinvestment in upstream projects is expected to make a quick recovery more challenging, according to analysts.


BP aims to cut costs by $2 billion (S$2.7 billion) by the end of 2026. Its net debt was approximately $24 billion at the end of Q3.
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