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BP has revealed plans to cut almost 8,000 jobs as part of a major cost-saving drive amid pressure from investors to roll back net-zero emissions plans.
Chief executive Murray Auchincloss (pictured) told staff yesterday that the oil giant would cut 4,700 jobs (5 per cent of its global workforce) and 3,000 contractor positions.
The cuts, part of a plan to save £1.6bn by the end of next year, come as Auchincloss faces intense scrutiny over the energy company’s green strategy.
Shareholders have demanded that the Canadian businessman, who replaced the disgraced Bernard Looney last year, scale back his predecessor’s shift toward green energy.
Investors want Auchincloss to confirm that BP will abandon some climate targets following reports that the company had scrapped an earlier plan to cut oil and gas production by 40 percent by 2030.
Cuts: BP chief executive Murray Auchincloss (pictured) told staff the oil giant would cut 4,700 positions (5% of its global workforce) and 3,000 contractor positions.
It is also reportedly considering major investments in the Middle East and the Gulf of Mexico to boost BP’s oil production.
It comes amid concerns that BP has underperformed its London rival Shell and is lagging US peers such as ExxonMobil and Chevron, which have doubled down on fossil fuels.
Auchincloss was due to shed some light on BP’s strategy in a crucial update to investors in New York on February 11.
But in a blow to shareholders, the capital markets day was this week delayed to February 26 and moved to London to allow Auchincloss to recover from surgery.
Yesterday, Auchincloss, 54, told staff the company was “uniquely positioned to increase value through the energy transition”, adding: “But that doesn’t give us an automatic right to win.”
‘We have to continue improving our competitiveness and move at the pace of our customers and society. That’s what we’re doing.”
BP said the job cuts were part of a multi-year plan to achieve savings across the business, and that there could be further reductions this year and in the future.
Auchincloss said the job losses announced yesterday “represent much of the reduction planned for this year.”
He said the company was “focusing resources on our highest-value opportunities” and has stopped or paused 30 projects since June last year.
The Auchincloss memo said about 2,600 of the contractors involved in the job cuts have already left the business.
BP has 90,000 employees, 14,000 of whom are in the UK. Of its workers in the UK, 6,000 work in petrol and service stations and would not be affected by the cuts.
He said: ‘I recognize the uncertainty this brings for all those whose work may be at risk, and also the effect it may have on colleagues and teams.
We have a range of support available and please continue to look out for each other, be considerate and continue to prioritize safety, especially in times of change.’
Earlier this week, BP revealed that lower refining margins would hit fourth-quarter profits by up to £246m.
This follows a sharp drop in third-quarter profits, which fell 30 per cent to £1.8bn, its lowest level since the pandemic.
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