Oil giant British Petroleum to lay off 4,700 employees
What's the story
Oil giant British Petroleum (BP) has announced plans to cut thousands of jobs as part of a major cost-cutting effort. The company said, "Today, we have today told staff across BP that the proposed changes that have been announced to date are expected to impact around 4,700 BP roles - these account for much of the anticipated reduction this year." Along with this, BP also plans to cut 3,000 contractors. The company currently employs some 87,800 people globally.
Savings target
Cost-cutting measures follow CEO's cash savings goal
The lay offs are part of BP's strategy to lower costs, following CEO Murray Auchincloss's declaration last year. He had stated that the company aims to achieve at least $2 billion in cash savings by the end of 2026. The announcement comes as BP faces challenges in its performance compared to its European rivals, prompting market participants to scrutinize the firm's investment strategy.
Market response
BP's shares rose 1.4% on Thursday morning.
With the announcement of job cuts, BP's shares rose 1.4% on Thursday morning. This market response indicates that investors may be seeing these cost-cutting measures as a necessary step toward achieving BP's financial goals and enhancing its competitive position in the energy market.
Challenges ahead
BP warns of profit hit, delays investor event
In a recent trading update, BP warned that weaker refinery margins and turnaround activity could reduce its fourth-quarter profit by $100 million to $300 million. The company also anticipates further declines in oil production. Separately, BP has postponed an investor event scheduled for next month to allow CEO Auchincloss to fully recover from a "planned medical procedure." The capital markets event will now take place in London on February 26.