By Ebi Kesiena
British energy giant BP has announced plans to cut 4,700 staff jobs, approximately five percent of its global workforce, along with thousands of contractor roles as part of a cost-reduction initiative.
The move is part of a “multi-year programme to simplify” the company and enhance its performance, according to a statement released by BP.
BP’s CEO, Murray Auchincloss, has shifted the company’s focus towards oil and gas to increase profitability, stepping back from some of its climate targets since assuming leadership a year ago.
In a message to employees on Thursday, Auchincloss highlighted ongoing efforts to streamline operations and position BP as a “simpler, more focused, higher-value company.” He acknowledged the uncertainty the job cuts bring and expressed understanding of the impact on affected employees and teams.
The company, which employs around 90,000 permanent staff worldwide, has indicated that additional job reductions may occur. BP expects about 4,700 roles to be impacted this year, alongside more than 3,000 contractor positions, of which 2,600 have already been terminated.
BP’s share price rose by approximately 1.5 percent on the FTSE 100 index following the announcement, reflecting investor confidence in the cost-saving measures. Auchincloss reiterated BP’s commitment to achieving at least $2.0 billion in cost savings by the end of 2026. To date, the company has halted or paused 30 projects to focus on high-value opportunities.
The strategic shift comes amid challenges for BP’s share performance relative to other oil majors like Shell, ExxonMobil, and Chevron. In recent years, BP has adjusted its climate targets, lowering its emissions reduction goal to 20-30 percent by 2030, down from the previous target of 35-40 percent. Additionally, BP plans to finalise a deal with the Iraqi government to develop four oil fields in Kirkuk by early February.
BP recently announced a significant reduction in renewable energy investment through 2030, partnering with Japanese power company Jera in a standalone joint venture for offshore wind operations. This decision follows a similar move by Shell, which has ceased new offshore wind project developments.
As BP and Shell report declines in third-quarter profits and prepare to release annual results, speculation continues about BP potentially abandoning its pledge to cut oil production by 25 percent by 2030. CEO Murray Auchincloss is set to present a new strategic direction at an investor day in February.
