BP cuts 5,000 jobs following the scandal of its ex-CEO Bernard Looney

BP will cut more than 5% of its global workforce as part of CEO Murray Auchincloss’ efforts to cut costs and restore investor confidence after the energy giant was rocked by scandal, the company said Thursday .

Around 4,700 employees and 3,000 subcontractor positions will be cut this year out of a workforce of around 90,000, according to an internal memo seen by Reuters.

BP shares were up 1% in morning trading.

Auchincloss said last year it would cut costs by at least $2 billion by the end of 2026 to boost returns and address investor concerns about its energy transition strategy.

“We still have much to do this year, next year and beyond, but we are making great progress in positioning BP to grow as a simpler, more focused, higher value business ” Auchincloss said in the memo.

BP is in a state of flux following the scandalous departure of former CEO Bernard Looney.

Looney resigned in September 2023 due to his failure to fully disclose his past personal relationships with colleagues, which was considered a violation of the company’s code of conduct.

BP initially investigated Looney’s personal dealings in 2022, but then assured the board he had been transparent.

However, new allegations surfaced in 2023, prompting the council to revisit the issue.

After discovering that Looney had not been fully forthcoming, BP announced his resignation effective immediately.

Last April, two female executives who were part of Looney’s leadership structure left the company.

His departure added uncertainty to the direction and future direction of the company, ultimately contributing to its return to traditional oil and gas investments under his successor, Auchincloss.

Since June, BP has stopped or paused 30 projects to prioritize the most profitable ones.

The company lags behind other oil majors. BP, whose market capitalization was $84.58 billion as of Thursday, is now valued at less than half that of Shell.

It also faces increasing competition from competitors whose market value was once significantly lower.

Investors are demanding decisive action as the company’s shares continue to plummet.

In 2008, BP stock was trading at nearly $150 per share.

Over the past five years, the stock has fallen nearly 20%. BP shares were trading at $31.30 at market close Wednesday.