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January 16, 2025 British Petroleum Plc (NYSE:BP) announced to layoff more than 5% of its employees around the world, a total of 4,700 jobs, and 3,000 roles from its contractors. It is part of the cost-reduction plans that initiated in 2023, the plan is to cut $2 billion in costs by the end of 2026 and workforce reduction is part of the plan.
Headed by the new CEO Murray Auchincloss, the layoff is expected to bring about better efficiency by streamlining operations and restore the confidence of investors after series of financial crises and the instabilities of energy markets.
BP is adapting to high operating expenses, declining oil prices while adapting with the current and new trends in the energy sector as the world is shifting to clean energy from traditional oil and gas to zero-carbon power by 2050.
The competition in renewable energy is intensifying and BP tries to secure a large share in the market by increasingly investing more in the renewable energy business and green technologies over the last couple of years through wind and solar investments, but it still relies on most of its income from the upstream legacy segments of the oil and gas industry.
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This article first appeared on GuruFocus.