BP To Slash 10,000 Jobs As Coronavirus Creates Slump In Energy Markets

From The Daily Caller

Varun Hukeri Reporter June 08, 2020 12:38 PM ET

Oil and gas giant BP announced Monday that it will cut 10,000 jobs from its global workforce, citing the negative impact of the coronavirus pandemic on the energy industry.

In an email sent to BP staff, CEO Bernard Looney said that the company’s net debt rose $6 billion in the first quarter of 2020, and that the layoffs would mainly affect senior level employees in office-based roles. Looney also pledged to bring down capital expenditure by 25% and trim the roughly $22 billion spent annually on operational costs, the Associated Press reported.

The energy industry has been hit hard by the coronavirus pandemic as demand for fuel and other resources dipped amid lockdowns and limits on business, travel and daily life. Since the beginning of the year, oil prices have dropped more than 90% partially because of the coronavirus, and the price of US crude oil even fell below $0 in April.

Because of the combination of unprecedented low oil prices, economic lockdowns and the pandemic, oil companies have reported huge losses this year. Energy analysts also worry that an economic downturn could cripple energy markets in the long-term.

Warwick University professor David Elmes, who is a leading expert on energy issues, stated that BP’s decision reflects wider challenges facing the energy industry as companies take on debt to finance operations in a time of greater capital constraint. (RELATED: China Poised To Buy Up Texas Oil Amid Coronavirus Slump)

European-based energy firms in particular have also announced plans to diversify their economic activities and gradually shift away from oil and gas, indicating that layoffs and corporate restructuring may become more likely in the future. “If this situation continues, there will be intense discussions about what can they do to move faster,” Elmes said.

Looney added that the decision to cut 15% of its workforce is also motivated by BP’s plan to transition to renewable energy, and a BP spokesman further stated that the coronavirus has only accelerated this plan, Reuters reported. BP aims to become a net-zero company by 2050, which would require eliminating 415 million tons of emissions.

This initiative would also require changing the traditional structure of the company, which has been dominated by oil and gas, and to rethink the company’s operations, including the $8 billion spent annually in “people costs.”

“It was always part of the plan to make BP a leaner, faster-moving and lower-carbon company,” Looney said in a statement posted Monday on BP’s website.

39 thoughts on “BP To Slash 10,000 Jobs As Coronavirus Creates Slump In Energy Markets

  1. “Looney added that the decision to cut 15% of its workforce is also motivated by BP’s plan to transition to renewable energy…”

    So much for “green”‘jobs.

    • I’m somewhat familiar with BP’s previous forays into “renewable” energy, all of which turned out not to be “green” but rather brown and smelly.

    • The Danish state oil company also reinvented itself, moving away from oil into the lucrative wind turbine building and operating business. Bolstered by massive taxpayer subsidies, they built the world’s largest offshore windfarm, Hornsea One. Just follow the money.

  2. Neil Fergusons girlfriend must be happy… I wonder what the democrats will say about it…

    • I don’t think she cares. Well, it’s clear she doesn’t! She’s got a 1.9 million pound house in a posh part of England, a 30 odd year old husband, a 50 year old lover who she can visit any time she likes during lockdown to get her parts greased, while millions struggle to pay for a meal!

  3. Left-wing lunatics are no doubt dancing in the streets and high fiving each other over this news.

  4. BP won’t exist inside 50 years.
    If you’re a shareholder get out on the next bounce.

    • “Warren June 9, 2020 at 2:38 am
      BP won’t exist inside 50 years.
      If you’re a shareholder get out on the next bounce.”

      “50 years”?
      Get out next bounce?

      Nebulous flimsy far in the future prediction with immediate drastic financial advice?
      Professional doom crier, are you?
      Pitiful pathetic pusher of panic for panic’s sake, not present reality.

      The author of the article apparently failed to consider the effects of Russia and Middle East flooding fossil fuel markets prior to the COVID-19 episode.

      • Read BP balance sheet followed by a due diligence of its management and major shareholders and their green ambitions then reflect on your rant.

      • If they get out of oil and into “renewable” energy, then it won’t matter what Russia and the Middle East do.

        • If they can lay off 10k “senior” staff and still function, I’d say this was long over due.

          COVID is finished. The BLM riots have hardly been respecting “social distancing” rules yet after ten days of “unsafe” conduct, there is not the slightest sign of a “second wave” or an uptick in new cases.

          https://climategrog.files.wordpress.com/2020/06/covid-us.png

          In short it was all a load of bollocks.

          Now we can get on with life again , start burning all the fossil fuels we like, oil prices will be back to sustainable realistic values and BP will be boasting record profits by year end, much leaner for having dumped 10,000 parasitic middle management office workers.

  5. He was also quoted as saying that BP were “hemorrhaging roughly a million $ a day in costs….” makes you wonder how their “management” allowed this to happen in the first place.

    Virtue signalling is not a help in running an oil and gas exploration and production Co. Get woke, go broke.

    Not to worry, there will be plenty of smaller, leaner more agile Operators in those affected basins who are more than willing to make the economics work.

    • It’s not so much that they allowed it to happen, it’s that they allowed it to continue so long. I guess they believed that Russia and Saudi Arabia would patch things up a lot quicker than they did.

  6. Jobs are being cut across the board here in Australia. I am surprised Ferguson hasn’t been lynched by now!

    • Jobs have been and are still being lost world wide. The virus has caused none of this. The insane reaction to a flu virus has and should reversed immediately. Had this been treated as the flu it was, we would still be complaining about global climate change, not job losses and race riots.

      • I am totally aware that the virus had nothing to do with the current situation and is all due to political over-reaction to the modeled threat.

  7. “…since the beginning of the year, oil prices have dropped by more than 90%…” When was this written? Oil prices have recovered about half of their loss, and remember, oil prices were reduced by both corona virus and the simultaneous (and ill-advised) pissing contest between Russia and Saudia Arabia. BP executives appear to be operating on some idea other than “maximize shareholder wealth” and one has to wonder what that might be? Here’s a clue: BP is going Green by 2050? BP used to be an oil exploration, development, and production company, and now what?

    • They’re diversifying, as any company does, if they want to carry on existing in a changing market.

      • Adam Gallon, forgive me but I’m thinking you never sat in Board meetings discussing your core corporate identity, whether it should or should not be modified, and what the investor consequences might be with either change or no change. Big companies, like BP, don’t go lurching around outside their investor identity, they undertake careful market studies, both as to profit motive and shareholder identity. Changing market? Yea, V-shaped recovery from all the nonsense.

  8. Slashing 10K jobs of senior management seems to me like they are ridding the top heavy portion of the company. Nothing new, companies tend to do it over time, those that fall prey to every position needs 4 managers.

    • “If the Covid didn’t rid us of these expensive old farts, then we will have to do it manually.”

  9. Be sure and take out the BP bean counters that caused a lot of the short cuts and safety violations with worker deaths over the years.

    • It isn’t the bean counters. After all, all they do is…count beans. It’s operational management that decides how they respond to the count.

  10. Headline should read “as the contrived response to Coronavirus creates slump in energy markets.”

  11. It is bad enough when the Loonitics are running the asylum, but with this delusional Kerryman in charge of my pension, I am really worried.

  12. All change-

    WHO-
    “Government responses should focus on detecting and isolating infected people with symptoms, the World Health Organization said.
    Preliminary evidence from the earliest outbreaks indicated the virus could spread even if people didn’t have symptoms.
    But the WHO says that while asymptomatic spread can occur, it is “very rare.”

  13. Lock down looking very unnecessary- I wonder if , Mr Monckton , will change his mind.

  14. WMO- “If asymptomatic spread proves to not be a main driver of coronavirus transmission, the policy implications could be tremendous. A report from the U.S. Centers for Disease Control and Prevention published on April 1 cited the “potential for presymptomatic transmission” as a reason for the importance of social distancing.”

  15. Looney added that the decision to cut 15% of its workforce is also motivated by BP’s plan to transition to renewable energy

    Looney tunes?

    • so they know it’s a white elephant and are downsizing before they even start.

      Reassuring news for investors.

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