BP to Slash 7,700 Jobs in Aggressive Cost-Cutting Strategy

In a decisive move to streamline operations and bolster investor confidence, BP has unveiled plans to reduce its global workforce by approximately 7,700 positions. This reduction includes 4,700 internal roles and 3,000 contractor positions, collectively accounting for just over 5% of the company's 90,000-strong workforce.

Strategic Rationale

The workforce reduction is a pivotal component of BP's broader strategy to cut operational costs by at least $2 billion by the end of 2026. CEO Murray Auchincloss, who assumed leadership in January 2024, has been steering the company towards a leaner and more focused operational model. In a memo to employees, Auchincloss emphasized the necessity of these measures, stating, "We have got more we need to do through this year, next year, and beyond, but we are making strong progress as we position BP to grow as a simpler, more focused, higher-value company."

Operational Impact

The job cuts are part of a multi-year program aimed at simplifying BP's business structure. The company has already identified $500 million in cost savings to be realized in 2025, a quarter of the $2 billion target set for the end of 2026.

The reductions will span various departments and geographies, with a significant impact anticipated in the UK and the U.S. BP employs approximately 14,000 individuals in the UK, with around 6,000 based in petrol and service stations, which are not expected to be affected by these cuts.

Employee Support and Transition

Acknowledging the uncertainty and challenges posed by the layoffs, Auchincloss assured employees of the company's commitment to providing support during the transition. He urged staff to "continue to show care for each other, be considerate, and keep putting safety first—especially during times of change."

Market and Investor Reactions

The announcement comes on the heels of BP's warning that its fourth-quarter results for 2024 would be impacted by weaker oil and gas production. The company's share price has declined by approximately 20% since the previous spring, prompting a need for decisive action to restore investor confidence.

Future Outlook

BP's cost-cutting measures are part of a broader industry trend where energy companies are adapting to fluctuating market dynamics and the global shift towards sustainable energy sources. By streamlining operations and focusing on high-value opportunities, BP aims to enhance its competitiveness and resilience in a rapidly evolving energy landscape.

The company's leadership remains optimistic that these strategic adjustments will position BP for sustainable growth and profitability in the coming years.​