Oil giant BP announced Monday that it will be cutting 10,000 jobs — one out of every seven of its employees — because of the economic downturn caused by the coronavirus.
“The oil price has plunged well below the level we need to turn a profit. We are spending much, much more than we make – I am talking millions of dollars, every day,″ chief executive Bernard Looney said in an email to staff shared with The Hill.
“We have to spend less money.”
The oil industry has been hit particularly hard by the pandemic. A trade war between Saudia Arabia and Russia flooded the oil markets with crude shortly before countries across the globe issued stay-at-home orders that pushed oil demand down by roughly a third.
The BP cuts will have a significant impact at the senior levels, where the company will cut a third of group leaders.
The company will also reduce its capital expenditures by 25 percent, cutting roughly $3 billion in funds that are often geared towards oil production.
The cuts come shortly after BP announced an ambitious plan to offset its carbon footprint by 2050, part of an effort to “seize opportunities throughout the energy transition.”
“It was always part of the plan to make BP a leaner, faster-moving and lower carbon company. … Then the covid-19 pandemic took hold,” Looney wrote.
“To me, the broader economic picture and our own financial position just reaffirm the need to reinvent BP,” he added.