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BP plans to cut 4,700 jobs, or just over 5 percent of its workforce, as CEO Murray Auchincloss tries to save costs and revive a stock price that has lagged its rivals over the past year.
The British oil major is also reducing the number of contractors it uses by 3,000 this year, adding that 2,600 of them have already left, according to a memo Auchincloss sent to staff on Thursday.
Auchincloss said in the memo: baby It was making “strong progress” in its attempt to be “a simpler, more focused and more valuable company”.
Auchinclosswhich celebrates its first year as permanent CEO on Friday, is under mounting pressure from shareholders after several quarters of disappointing results.
He first took over the top job on an interim basis in September 2023, following the departure of Bernard Looney, and last year announced a two-year plan to save $2 billion in costs. The group had $42 billion in cash costs in 2023.
In the memo, Auchincloss said BP has “paused or paused 30 projects since June” to streamline its focus, and intends to expand its operations in lower-cost centers such as India.
Last year, the company opened a 400-person technical center in Pune, near Mumbai, to provide engineering, data and subsurface services.
“We are uniquely positioned to increase value through the energy transition. But that does not give us an automatic right to win. We have to continue to improve our competitiveness and move at the pace of our customers and society,” Auchincloss said.
BP shares rose 1.4 percent on Thursday, but have fallen 5 percent since Auchincloss took over the company on a permanent basis. The stock price has lagged behind that of competitors, including Shell, Exxon Mobil and Chevron.
BP's workforce has swelled to nearly 90,000 people, with about 20,000 of them joining following its acquisition of the TravelCenters of America network of nearly 300 filling stations in 2023.
It also bought out its joint venture partners in solar company Lightsource BP and biofuels group Bunge Bioenergia last year, adding more staff.
In 2020, Looney laid out a radical plan to dramatically reduce BP's oil and gas production by 2030 and build a portfolio of companies to benefit from the green energy transition.
Despite more difficult conditions for the renewable energy sector, Auchincloss has so far stuck to Looney's plan. However, he has faced calls from analysts to communicate more clearly how BP will divide its business in the future between fossil fuels and renewables.
BP this week postponed a February investor event so Auchincloss could recover from a “planned medical procedure.”
The company is scheduled to announce fourth-quarter earnings on February 11.
In recent weeks, analysts lowered their estimates for BP's fourth-quarter earnings after noting that trading in the period was weaker than they expected.
