BP Job Cuts

BP is making significant changes to its workforce as part of a strategic effort to streamline operations and cut costs. The London-based energy giant announced on January 16, 2025, that it will reduce its global workforce by approximately 4,700 employees, representing about 5% of its total staff of around 90,000. Additionally, BP plans to eliminate around 3,000 contractor positions. This decision comes as the company aims to save $2 billion (£1.64 billion) by the end of 2026, a move that has been prompted by ongoing investor concerns and a series of disappointing quarterly performances.

In an internal memo to staff, CEO Murray Auchincloss emphasised the necessity of these cuts as part of a broader initiative to simplify and focus BP's operations. He stated, “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”. Auchincloss acknowledged the uncertainty these changes bring for employees and assured them that support systems would be in place during this transition.

The job cuts are part of a multi-year program initiated last year aimed at enhancing BP’s competitiveness and resilience while lowering operational costs. Since June 2024, the company has already paused or stopped 30 projects as it redirects resources toward its highest-value opportunities. Notably, Auchincloss took over as CEO following the resignation of Bernard Looney in September 2023 due to undisclosed relationships with employees, further intensifying the need for organisational restructuring.

The decision to cut jobs is also influenced by external pressures on the oil and gas sector. BP has faced scrutiny over its commitment to reduce fossil fuel production amid a global shift towards renewable energy sources. Investors have expressed concerns regarding BP's ability to effectively navigate this transition while maintaining profitability. The company’s recent trading update indicated that it would report weaker fourth-quarter results due to declining oil and gas production levels.

While BP has not disclosed specific details about which roles will be affected, reports suggest that significant reductions could occur within its technology division and operational teams in higher-cost regions such as the UK and US, with work potentially shifting to lower-cost countries like Hungary, India, and Malaysia. This strategy aligns with BP’s goal of expanding its business and technology centres in regions with rich talent pools.

The announcement has sparked discussions about the future direction of BP as it seeks to balance traditional energy production with investments in renewable energy. As part of this transition, Auchincloss is expected to outline his long-term strategy for the company during an upcoming investor day scheduled for February 26, 2025. This event will follow the release of BP's full-year financial results on February 11.

As BP navigates these challenging waters, it remains focused on ensuring safe and reliable operations while supporting its teams through this transformation. The company's ability to adapt and respond to market demands will be critical in maintaining investor confidence and securing its position in an evolving energy landscape.