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BP is cutting 4,700 jobs, or just over 5% of its workforce, as Chief Executive Murray Auchincloss tries to cut costs and revive a stock price that has lagged rivals over the past year. past year.
The British oil major is also reducing the number of subcontractors it uses by 3,000 this year, adding that 2,600 of them had already left, according to a memo sent to staff by Auchincloss on Thursday.
In the memo, Auchincloss said P.A. was making “great strides” in its attempt to become a “simpler, more focused, higher value company.”
Auchincloswho marks his first year as permanent CEO on Friday, is under increasing pressure from shareholders after several quarters of disappointing results.
Auchincloss, who first stepped into the role on a temporary basis in September 2023 following the departure of Bernard Looney, last year announced a two-year plan to save $2 billion in costs.
In the memo, the 54-year-old Canadian said BP had “stopped or paused 30 projects since June” to streamline its operations, and that it also intended to expand its operations into lower-cost hubs like India.
Last year, the company opened a 400-person technical center in Pune, near Mumbai, India, to provide engineering, data and subsurface services.
“We are in a unique position to increase value through the energy transition. But that doesn’t automatically give us the right to win. We must continue to improve our competitiveness and evolve at the pace of our customers and society,” said Auchincloss.
BP shares rose nearly 2 percent following the news, but have fallen 5 percent since Auchincloss took the reins of the company permanently. The stock price lags behind that of its competitors, including Shell, ExxonMobil and Chevron.
BP’s workforce has grown to around 90,000 people, around 20,000 of whom joined after acquiring the TravelCenters of America network of nearly 300 gas stations in 2023.
BP also bought out its joint venture partners in the Lightsource BP and Bunge Bioenergia solar businesses last year, leading to the increase in staff.
This week, BP postponed an investor event in February so Auchincloss could recover from a “planned medical procedure”.
The company is expected to report its fourth-quarter results on February 11.
In recent weeks, analysts have cut their estimates for BP’s fourth-quarter profit after the company reported that trading in the period was weaker than expected.
