BP cuts 5,000 jobs in wake of ex-CEO Bernard Looney scandal

BP will slash over 5% of its global workforce as part of CEO Murray Auchincloss’ efforts to reduce costs and rebuild investor confidence after the energy giant was rocked by scandal, the company said Thursday.

Around 4,700 employees and 3,000 contractor positions will be cut this year from a workforce of around 90,000, according to an an internal memo seen by Reuters.

BP shares were up 1% in morning trading.

Auchincloss last year said he would cut costs by at least $2 billion by the end of 2026 to boost returns and address investor concerns over its energy transition strategy.

“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.

BP has been in a state of flux in the wake of the scandalous exit of former CEO Bernard Looney.

Looney resigned in September 2023 due to his failure to fully disclose past personal relationships with colleagues, which were deemed a violation of the company’s code of conduct.

BP had initially investigated Looney’s personal relationships in 2022, but at the time he assured the board that he had been transparent.

However, new allegations surfaced in 2023, prompting the board to re-examine the issue.

Upon discovering that Looney had not been fully forthcoming, BP announced his resignation with immediate effect.

Last April, two top female executives who were part of Looney’s management structure left the company.

His departure added uncertainty to the company’s leadership and future direction, ultimately contributing to its shift back toward traditional oil and gas investments under his successor, Auchincloss.

Since June, BP has halted or paused 30 projects to prioritize those with the highest profitability.

The company has fallen behind other oil majors. BP, whose market capitalization was at $84.58 billion as of Thursday, is now valued at less than half of Shell.

It also faces increasing competition from rivals that were once significantly smaller in market value.

Investors are demanding decisive action as the company’s stock continues to flounder.

In 2008, BP’s stock was trading at nearly $150 a share.

In the last five years, the stock is down nearly 20%. BP shares were trading at $31.30 as of the market close on Wednesday.