London-based energy giant BP PLC (NYSE: BP), which has its U.S. headquarters in Houston, plans to cut about 15% of its global headcount, Reuters and the Associated Press reported June 8.
Sources told Reuters that CEO Bernard Looney told employees in a global online call that about 10,000 of the company’s 70,100 positions would be cut. The cuts, most of which are expected by the end of the year, are in response to the Covid-19 pandemic and Looney’s plan to shift BP more toward renewable energy, per Reuters.
A company spokesman declined to comment to Reuters.
The AP notes that the cuts are slated to affect office-based roles and are expected to impact senior levels significantly, making the senior structure flatter.
BP already announced plans to cuts its leadership positions from 250 to about 120. The remaining leadership positions will include more than 100 so-called “Tier 2” managers who will lead the 11 divisions Looney created in February in an effort to reinvent BP, Reuters previously reported.
Part of those previously reported changes include David C. Lawler becoming chairman and president of BP America Inc., succeeding Susan Dio on July 1. Lawler will retain his current role as CEO of BPX Energy, the company’s Lower 48 division, which is based in Denver.
In April, BP announced it would cut its capital spending plans for 2020 to about $12 billion, down 25% compared to its original full-year guidance, in response to the pressures facing the energy industry. Social distancing as a response to the Covid-19 pandemic has gouged demand, while economic conflict between OPEC member-states and Russia is leading to increasing supply. Together, those two factors pushed oil prices to record low levels, even deep into negative value during April.
As of last fall, BP was No. 5 on the Houston Business Journal’s 2019 Largest Houston-Area Energy Employers List, based on its 9,537 local full-time employees.
By Olivia Pulsinelli, Assistant Managing Editor
Courtesy of The Houston Business Journal