BP PLC is planning to slash senior management positions at the London-based oil major by more than 50% as the company continues to embark on a transition into renewables and low-carbon energy, a company spokesperson confirmed.
Although the official declined to offer a specific figure regarding the management cuts, a May 22 Reuters article said BP will reduce top-level positions to about 120 from 250. Many employees under former CEO Bob Dudley are expected to leave in the next few months.
BP and its peers have been working to cut capital expenditures and implement other cost-saving measures to curtail damage to their businesses resulting from the coronavirus pandemic and the subsequent plunge in oil prices. BP previously announced that it would reduce spending this year by 25% of its previous guidance, to $12 billion.
"We are responding fast to adapt BP to the most brutal market conditions we have seen in a long time," CEO Bernard Looney said during the company's first-quarter earnings call at the end of April.
However, BP will maintain its $500 million budget for renewables and non-oil technologies to help achieve a self-imposed reduction in greenhouse gas emissions across its operations to net zero by 2050.
Looney took over as CEO in February when Dudley retired. At that time, Looney set out ambitious new climate goals, saying the integrated oil major would move away from the traditional oil business model and overhaul its corporate structure.
Under the new corporate structure, the company will combine its upstream unit with its downstream and chemicals segments into one — production and operations. The new structure will also include three other units: customers and products, gas and low-carbon energy, and innovation and engineering.
Gordon Birrell will head the combined upstream and downstream group, which will include 14 senior managers, according to Reuters, citing a May 14 internal email from Looney.
BP plans to offer specific emissions reduction targets and more details about its long-term strategy in September at its investor day.
Looney's email did not provide any additional details about potential employee job cuts. At the end of March, Looney said there would be no layoffs for three months in the wake of the pandemic.
"We'll provide more information on the redundancy freeze in June," Looney wrote in the email, Reuters reported.