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BP plc BP, the British oil and gas giant, has announced job cuts to reduce its global workforce as part of its cost-cutting initiatives to restore investors’ confidence in the energy stock. The company will reduce its global staff by 5%, including almost 4,700 employees and 3,000 contractor positions. Per Reuters, the job cuts were announced in an internal memo.
BP’s CEO Auchincloss has mentioned that the company aims to reduce costs by at least $2 billion by the end of 2026. Auchincloss also mentioned that he intends to build BP into a simple, focused, higher-value company,suggesting that he will work on improving the efficiency of the company and increasing its profitability. The job cuts are, in part, an effort to bring down costs and restore investor confidence in the stock while reassuring investors of BP’s energy transition strategy.
BP will undergo reviews across all departments before laying off its employees. It currently employs around 90,000 people worldwide. The exact breakdown of the job cuts has not been disclosed by BP. However, per Reuters, approximately 1,100 roles are anticipated to be eliminated from BP’s technology division. These job cuts will be implemented either through redundancies or by transferring work from the United States and the U.K. to other countries like Malaysia, India and Hungary.
Auchincloss will reveal the company’s new strategy on Feb. 26, 2025, on an investor presentation day. Auchincloss is working on reversing the company’s previous strategy of aggressively investing in renewables and cleaner energy solutions while moving away from its traditional oil and gas business. Auchincloss aims to focus on BP's traditional oil and gas business to increase its profitability while scaling back its exposure to renewables.
BP is set to announce fourth-quarter results on Feb. 11, 2025.
BP’s Zacks Rank and Key Picks
BP currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are Sunoco LP SUN,TechnipFMC plc FTI and Cheniere Energy, Inc. LNG. Sunoco currently sports a Zacks Rank #1 (Strong Buy), while TechnipFMC and Cheniere Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores and distributors. Its current distribution yield is greater than that of the industry's composite stocks, providing unitholders with consistent returns.