BP to cut 10,000 jobs because of oil price crash

KATWIJK, NETHERLANDS - APRIL 26: A BP logo is pictured outside its gasoline stand on April 26, 2020 in Katwijk, Netherlands. (Photo by Yuriko Nakao/Getty Images)

 (CNN) — BP is cutting 10,000 jobs as it reels from a crash in oil prices and tries to pivot toward renewable energy.

CEO Bernard Looney told employees on Monday that the oil giant would reduce its global workforce by nearly 15% this year. Most of the cuts will affect office jobs.

The company said in February that it would reorganize its business to achieve net zero emissions by 2050 or sooner. The coronavirus pandemic, which caused oil prices to plunge as people hunkered down at home, has only accelerated the need to reduce costs, Looney said.

Brent crude futures, the global benchmark for oil prices, hit their lowest level in decades in April, falling below $20 per barrel. They’ve since staged a comeback and were last trading above $42 per barrel. But that’s still well below where prices started the year.

“The oil price has plunged well below the level we need to turn a profit,” Looney, who took over BP’s top job earlier this year, said in an email to employees. “We are spending much, much more than we make — I am talking millions of dollars, every day.”

BP also announced that senior leaders wouldn’t get a pay increase through March 2021. It was also “very unlikely” to pay any cash bonuses for 2020, the company added.

The company has so far resisted pressure to cut payouts to shareholders, despite a $6 billion increase in its net debt in the first quarter. The board has said it will reconsider whether it can afford to pay dividends on a quarterly basis.