(Alliance News) - The boss of UK oil giant BP PLC has told staff it plans to cut 10,000 jobs from its global workforce just weeks after increasing the dividend it pays to shareholders.
The company said the move will "significantly impact senior levels" of management in the business, with its top leadership roles to be cut by a third.
It said the majority of the redundancies will be made by the end of this year, after the business took a major hit from the coronavirus pandemic.
BP said the cuts are part of plans for the business to cut its operating costs by USD2.5 billion for new financial year, although the cuts "will likely have to go even further".
In an email to staff, BP Chief Executive Bernard Looney said: "We will now begin a process that will see close to 10,000 people leaving BP – most by the end of this year.
"The majority of people affected will be in office-based jobs.
"We are protecting the frontline of the company and, as always, prioritising safe and reliable operations."
The company employs 70,000 people across the globe, meaning the cuts will slash the size of its workforce by 14%.
Group leaders and senior level leaders, who will be worst hit by the cuts, will also not be given any pay rises until March 2021 at the earliest, while BP will not pay any cash bonus this year.
The news comes less than two months after BP increased the dividend that it pays to shareholders, despite a major hit from the pandemic.
It will likely raise eyebrows within the business as staff eye BP's long-term rival Royal Dutch Shell PLC, which decided to slash its dividend by two thirds – the first time the shareholder payout was lowered since the Second World War.
Looney said that the pandemic and a recent drop in the price of oil meant BP has to slash spending.
"The oil price has plunged well below the level we need to turn a profit. We are spending much, much more than we make – I am talking millions of dollars, every day. And as a result, our net debt rose by USD6 billion in the first quarter," he said.
Looney has set out to considerably transform the oil giant after stepping up to the top job in February.
As he replaced American Bob Dudley, Looney promised that BP would be an emissions-neutral company by the middle of the century.
However, his commitment to the challenge of global warming has been questioned by campaign groups.
So far the ambition has merely been expressed as a vague goal, with few specifics.
Looney has promised to lay out a more thorough road map in September.
By Henry Saker-Clark and August Graham, PA City Reporters
source: PA
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