BP cuts over 5% of workforce to reduce costs

By Ron Bousso

LONDON (Reuters) -BP will cut over 5% of its global workforce, it said on Thursday, as part of CEO Murray Auchincloss’ efforts to reduce costs and rebuild investor confidence in the energy giant.

Around 4,700 employees and 3,000 contractor positions will be cut this year, BP (NYSE:) told Reuters. The cuts were announced in an internal memo seen by Reuters earlier on Thursday.

BP shares were up 1.8% at 1110 GMT.

Auchincloss last year said it would cut the British company’s costs by at least $2 billion by the end of 2026 to boost returns and address investor concerns over its energy transition strategy.

He was also seeking to restore confidence following the abrupt resignation of his predecessor Bernard Looney in September 2023 for failing to disclose relationships with employees.

The job cuts follow reviews of all of BP’s divisions. The exact breakdown of the cuts was not disclosed. BP has a workforce of around 90,000.

“We have got more we need to do through this year, next year and beyond, but we are making strong progress as we position BP to grow as a simpler, more focused, higher-value company,” Auchincloss said in the memo.

Shares in the group have underperformed those of most of its rivals over the last year, down by over 5%, similar to French rival TotalEnergies (EPA:) and compared with a 5.5% gain for Shell (LON:) and Exxon Mobil (NYSE:)’s 14% gain.

Auchincloss, who took office a year ago, will lay out his new strategy at an investor day on Feb. 26.

He has already taken major steps to reverse his predecessor’s strategy of shifting away from oil and gas.

As part of the new effort to reduce exposure to renewables, BP and Japanese power generator JERA last month agreed to join forces to form one of the world’s largest offshore wind operators.

Rival Shell has also made reductions to its workforce in recent years as part of CEO Wael Sawan’s cost-cutting drive. Those included a 20% reduction in its oil and gas exploration division and cuts in its low-carbon division.

BP will publish its fourth-quarter and full-year results on Feb. 11.