Oil and gas company, BP to cut 10,000 jobs worldwide amid virus pandemic

 Oil and gas company BP announced Monday that it will slash its global workforce by 10,000 jobs as the COVID-19 pandemic slams the energy industry.

Chief Executive Bernard Looney said that the cuts will affect office-based roles in BP’s global workforce of 70,000 people and come mostly this year. The changes are expected to significantly affect senior levels, cutting the number of group leaders by a third.

“We are spending much, much more than we make – I am talking millions of dollars, every day,″ Looney said in an email to staff that revealed that net debt rose by $6 billion in the first quarter. “We have to spend less money.”

David Elmes, who leads the Global Energy Research Network at Warwick Business School, said BP’s cuts are symptomatic of the wider challenges facing the industry, with firms in the sector thinking about cutting costs.

“BP and the other European-based international companies have already said they will become less focused on oil and gas over time,″ he said. “If this situation continues, there will be intense discussions about what can they do to move faster.”

Major companies like BP with diversified businesses are likely to survive the pandemic, but smaller oil producers are going to have a harder time, analysts say.

U.S. shale companies in particular took on a lot of debt to finance operations and can only make ends meet at about $40 a barrel. Heavily-indebted companies will have to refinance at a time of capital constraint.

Some companies are already going under. Whiting Petroleum, a shale producer, filed for bankruptcy protection in April, for example, followed by Diamond Offshore Drilling. More are expected.

Also Read:

RENAULT TO CUT 15,000 JOBS IN 'VITAL' COST-CUTTING PLAN

ELECTRIC CAR SALES JUMPED BY 57 PERCENT Q1 2020 IN EUROPE

APRIL EUROPEAN CAR SALES SEE WORST DROP SINCE RECORDS BEGAN​​​​​​​

CORONAVIRUS UPDATE - CAR PLANTS GREENLIGHTED TO RESUME WORK IN WUHAN, CHINA​​​​​​​

VOLKSWAGEN RESTARTS PRODUCTION IN GERMANY AFTER CORONAVIRUS LOCKDOWN