CEO Bernard Looney told employees on June 8 that the oil giant would reduce its global workforce by nearly 15 percent this year. Most of the cuts will affect office jobs.
The company said in February that it would reorganize its business to achieve net zero emissions by 2050 or sooner. The CCP (Chinese Communist Party) virus pandemic, which caused oil prices to plunge as people hunkered down at home, has only accelerated the need to reduce costs, Looney said.
Brent crude futures, the global benchmark for oil prices, hit their lowest level in decades in April, falling below $20 per barrel. They’ve since staged a comeback and were last trading above $42 per barrel. But that’s still well below where prices started the year.
“The oil price has plunged well below the level we need to turn a profit,” Looney, who took over BP’s top job earlier this year, said in an email to employees. “We are spending much, much more than we make—I am talking millions of dollars, every day.”
BP also announced that senior leaders wouldn’t get a pay increase through March 2021. It was also “very unlikely” to pay any cash bonuses for 2020, the company added.
The company has so far resisted pressure to cut payouts to shareholders, despite a $6 billion increase in its net debt in the first quarter. The board has said it will reconsider whether it can afford to pay dividends on a quarterly basis.
Chris Liakos contributed reporting.
The CNN Wire and Epoch Times staff contributed to this report.