Oil giant, BP, has announced plans to cut 10,000 jobs worldwide, citing a global decline in demand for oil because of the COVID-19 pandemic. Therefore, staff will be able to apply for voluntary redundancy with effect from 15th June 2020.
According to the firm’s Chief Executive Officer, Bernard Looney, the oil price has plunged well below the level they need to turn a profit.
Countries across the globe have ordered people to stay indoors and not travel, which has caused a slump in demand for oil. Brent crude futures, the global benchmark for oil prices, hit their lowest level in decades in April, falling below $20 per barrel, less than a third of the $66 it cost at the start of the year. It has since partly recovered to around $42 a barrel.
“It currently costs around $22 billion a year to run the company, of which around $8 billion is people costs.” Yahoo Finance quotes Looney. BP’s net debt rose by $6 billion in the first quarter of this year.
Elsewhere, European firm, Royal Dutch Shell Plc is said to be offering voluntary redundancies in a bid to become leaner, after it slashed its dividend by two-thirds last quarter.
BP is a multinational oil and gas company with its headquarters in London, United Kingdom. It is one of the world’s seven oil and gas “supermajors”. Its performance in 2012 made it the world’s sixth-largest oil and gas company, the sixth-largest energy company by market capitalization, and the company with the world’s 12th-largest revenue (turnover).
As of 31st December 2018, BP had operations in nearly 80 countries worldwide, produced around 3.7 million barrels per day (590,000 m3/d) of oil equivalent, and had total proven reserves of 19.945 billion barrels (3.1710×109 m3) of oil equivalent.