BP to slash 10,000 global jobs this year

The energy giant has been hit hard by the collapse in oil prices. Photo / Getty Images

BP will axe more than 10,000 jobs this year as low oil prices bite and the energy titan accelerates its switch to green power.

Bernard Looney, the company's chief executive, told staff on Monday that 15pc of the firm's global workforce is to be laid off following a collapse in the oil price that has left the industry reeling.

Senior executives will be included in the cutbacks, with one third of all top managers getting laid off.

The majority of those affected are expected to leave this year, BP said. Most roles affected will be in the company's offices, with oil platform engineers and other frontline staff expected to be protecte.

Senior managers will not get a pay rise this year and the annual cash bonuses usually paid to about half of BP's workers are now very unlikely, a spokesman said.

Shares rose more than 3pc in afternoon trading in London.

The cuts follow a devastating period for the energy industry, with oil prices falling as much as 70pc this year.

In an email to BP's 70,000 staff, Mr Looney said: "The oil price has plunged well below the level we need to turn a profit.

"We are spending much, much more than we make – I am talking millions of dollars, every day."

The company's net debt rose by $6bn (£4.7bn) in the first quarter of the year, he said.

BP is also scrambling to slash capital expenditure on projects such as new rigs by 25pc this year – a reduction of nearly $3bn.

It currently costs around $22bn a year to run the company, Mr Looney said, with $8bn going towards salaries.

But the chief executive has also hinted at more cost-cutting to come.

He said: "We will likely have to go even further."

The crisis has hit at a moment of reinvention for the 111-year-old company.

In February, BP said it would slash its carbon emissions from oil and gas production to "net zero" by 2050 as part of the most ambitious overhaul in the firm's history.

BP has launched a huge restructuring operation under new boss Mr Looney, axing its traditional upstream and downstream model - which divides the business of extracting oil from that of selling it – and focusing instead on a different system which puts more emphasis on green energy.

This plan was already in motion when Covid-19 struck, Mr Looney said in his email on Monday, and has been fast-tracked as a result.

He said: "The broader economic picture and our own financial position just reaffirm the need to reinvent BP.

"While the external environment is driving us to move faster – and perhaps go deeper at this stage than we originally intended – the direction of travel remains the same."

- Telegraph