BP to slash global workforce by 5%

BP plans to cut more than 5% of its global workforce as part of a cost-reduction drive led by CEO Murray Auchincloss, the UK oil major said on January 16. The move, aimed at rebuilding investor confidence, will see approximately 4,700 employees and 3,000 contractor roles eliminated this year, according to an internal memo seen by Reuters. It will also reduce the company’s headcount for the first time since the COVID-19 pandemic.

The announcement lifted BP shares 1% by 12:00 GMT.

Auchincloss, who succeeded Bernard Looney following his abrupt resignation in September 2023, pledged last year to cut the company’s costs by at least $2bn by the end of 2026. The strategy seeks to boost returns and address shareholder concerns over BP's energy transition approach.

BP, which employs roughly 90,000 people, said the cuts follow a review across its divisions. Specific details on the distribution of job losses were not disclosed, but Emeka Emembolu, head of BP's technology division, noted in a separate memo that around 1,100 roles would be affected through redundancies or by shifting work from the UK and US to Hungary, India and Malaysia. BP declined to comment on the memo.

BP’s headcount dropped sharply between 2019 and 2020, falling from 70,100 to 63,600, as a result of cost-cutting measures introduced in response to the COVID-19 pandemic. The number of employees then grew to 65,900 in 2021 and 67,600 in 2022, before soaring to 87,800 in 2023, as a result of its $1.3bn acquisition of TravelCenters of America (TA), a major US travel service operator.

The move was aimed at increasing BP’s foothold in the convenience and mobility sector, while supporting growth in low-carbon areas like electric vehicle (EV) charging, biofuels and hydrogen. It also boosted BP’s headcount by around 20,000 employees.

Auchincloss emphasised progress toward transforming BP into a “simpler, more focused, higher-value company” in the internal communication.

BP’s shares have lagged most peers over the past year, down more than 5%. By comparison, Shell gained 5.5% and ExxonMobil surged 14%. BP’s underperformance has intensified scrutiny of its shift away from oil and gas under Looney, a strategy Auchincloss has partially reversed.

In December, BP and Japan’s JERA formed a joint venture to create one of the world’s largest offshore wind operators, signalling its desire to reduce exposure to renewables by sharing investments with a partner. Rival Shell has also cut jobs, including a 20% reduction in its oil and gas exploration unit.

Auchincloss will present BP’s updated strategy at an investor day on February 26. The company is set to report fourth-quarter and full-year earnings on February 11.