Oil Major BP to Cut 15% of Workforce

LONDON (Reuters) - BP will cut about 15% of its workforce in response to the coronavirus crisis and as part of Chief Executive Bernard Looney’s plan to shift the oil and gas major to renewable energy, it said on Monday.

Looney told employees in a global online call that the London-based company will cut 10,000 jobs from the current 70,100.

“We will now begin a process that will see close to 10,000 people leaving BP – most by the end of this year,” Looney said in a statement.

The job reductions are also part of Looney’s drive to make the 111-year-old oil company more nimble as it prepares for the shift to low-carbon energy, the sources said.

“It was always part of the plan to make BP a leaner, faster-moving and lower-carbon company,” Looney said.

The spokesman said that the coronavirus crisis “amplified and accelerated” BP’s transition plans.

Looney last month announced a large round of senior management appointments, halving the size of BP’s leaderhip team under his plan to reshape the company’s structure.

Shortly after taking office in February, the 49-year-old CEO said that he was creating 11 divisions to “reinvent” BP and dismantle the traditional structure dominated by its oil and gas production business and its refining, marketing and trading division.

BP likely is going to find itself susceptible to a little situation that another of the big major energy companies found itself in about 30 some years ago.

It seems that the company in a streamlining move radically reduced its engineering and science staff over several years to reduce costs. Well, it streamlined so much that it lacked the capability in-house to accurately keep up with a small thing called proven oil reserves Proven reserves are an asset used as collateral in big time finance deals. We're talking several billion $$$ here. Eventually the banks and regulators figgered this out and called the company on the practice. Between lawsuits and multinational fines, this cost the company about 10-billion $$$ as I recall. In addition, the consent decree required the company to add several hundred petroleum engineers to the staff immediately to support the upstream oil field management, etc. Problem is, there was a world wide shortage of petroleum engineers. Pet. engineers (and chemical engineers) do not grow on trees. Most engineering colleges do not have petroleum engineering and the ones that do generally turn out something like a dozen new petroleum engineers per year. It cost the company a royal mint to restaff their engineering.

Sooo, my fearless prediction is that within 5 years, BP is likely to have some interesting problems unless they radically downsize the petroleum side of the business, which sounds like they plan to do. Downsizing like this though is going to present some issues regarding the value of the asset in that without the significant people expertise to go along with the sale, the value of the asset to a buyer will be lower.

Dollars to donuts this 49yo president of BP is an MBA.

Early phase of the Green New Deal. New President enforcing strict carbon footprint tradeoffs and monitoring of each person’s private activities. (”You’ve made two unnecessary trips to visit that girlfriend. Consolidate or we will not let your car start tomorrow.”

Followed by another economic collapse (people unable to go anywhere, people taking long slow trips by battery powered bus instead of the banned airplanes, no one at the hotels and resorts, gas refineries laying off people).

AOC’s first version announced trains would cross the oceans instead of having a need for airplanes. No one has worked that out. Fun late night bartender talk, though. “If I ran the world....” But she is in the US Congress!

that’s what happened at the major corporation I worked at, if you were a white male over 45 you were the first to go, people of color or women were listed as “protected class” , On one layoff we had 60 people and 55 were white males, even though our company had almost 35% people of color. I know because I was one of the executives who had to layoff most of my staff who were white males, I had people of color who were rated marginally meets and white male rated as exceeds performer and it didn’t matter-diversity became more important than competency, AND this was before the current protest of BLM

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