BP Signals Job Cuts Ahead as It Reorganizes for the Future

(Bloomberg) -- On the day BP’s new boss outlined the oil major’s strategy to survive the energy transition, Bernard Looney also announced the company’s structural changes will lead to staff cuts over the next few years.

Looney has set an ambitious agenda to deal with the climate emergency, promising to zero-out all emissions on a net basis from the fossil fuels they pump from the ground. Though details on how this will be delivered were absent.

To achieve this, the company will reorganize a corporate structure that has been in place for decades. It will dismantle the upstream and downstream businesses and replace them with 11 new teams.

“I think it would be insincere not to suggest that there will be some staff layoffs as part of this program,” Looney said in an interview with Bloomberg. The redundancies, a result of the company’s reorganization, would happen over the next several years, he added.

Looney, a week into his new job as the chief executive officer of an oil company with 100-year history, is taking on a radical task. While some activists criticized the plan’s lack of detail, the CEOs proposal also received wide backing from others.

“For us the statement represents a step change in terms of vision for the company and one that moves the group toward the biggest reorganization and modernization in at least two decades, if not a century,” analysts at Barclays Plc said in a note.

Delivering the dividend, lower gearing and a $40-a-barrel breakeven price by 2021 are all parts of Looney’s ambition for BP, which, despite an eye on renewables, will need to produce oil and gas for decades to come.

To contact the reporters on this story: Laura Hurst in London at lhurst3@bloomberg.net;Alix Steel in New York at asteel6@bloomberg.net

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Christopher Sell, Rakteem Katakey

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