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Oil giant BP (BP+0.65%) is laying off about 5% of its workforce as it looks to bring down costs, CEO Murray Auchincloss told staff in an internal memo Thursday.
The cuts will affect some 4,700 employees and 3,000 contractor positions of its 87,800 employees worldwide, the company confirmed to Reuters. Auchincloss has embarked on a mission to return the London-based company to its former glory — and restore its relationship with investors.
“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, reported by Reuters.
Shares of BP were up 1.11% in mid-day trading on the London market. In 2024, BP stock fell more than 13%. The fourteenth-largest oil company in the world, BP has a market capitalization of $84.6 billion.
Emeka Emembolu, head of BP’s technology division, said in another internal memo that he expects 1,100 roles to be cut. Some of that will include outsourcing jobs from the UK and the U.S. to Hungary, India, and Malaysia, according to Reuters.
In the first quarter of 2024, Auchincloss set out plans to deliver at least $2 billion in cash cost savings at BP by the end of 2026. At the time, he said that would involve high grading the company’s portfolio, digital transformation, and improving supply chain efficiencies and global capability hubs.
The company’s reputation was rattled by the abrupt departure of Auchincloss’ predecessor, Bernard Looney, in late 2023 for failing to fully disclose details of past personal relationships with colleagues.
With the oil and gas sector at a turning point, BP isn’t the only company to trim jobs. In August, Reuters reported that Shell (SHEL-0.15%) would be reducing its oil and gas exploration and development workforce by 20%. Earlier in the year, the company made a similar round of cuts to its dealmaking team.
Shell, the fifth-largest oil company in the world, is also in the midst of a cost reduction plan that promises to save it between $2 and $3 billion by the end of this year.