Only a quarter of BP’s 10,000 job cuts to be voluntary

BP says the layoff of almost 15 percent of its workforce will not affect frontline production facilities. (AFP)
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Updated 17 October 2020

Only a quarter of BP’s 10,000 job cuts to be voluntary

  • BP said voluntary redundancies were offered to people in offices across 21 countries

LONDON: BP is set to make around 7,500 compulsory redundancies after roughly 2,500 staff — or just over one in ten of those eligible — applied for voluntary severance, according to an internal memo seen by Reuters and company sources.
The oil major announced plans in June to lay off almost 15 percent its 70,000-strong workforce as part of chief executive Bernard Looney’s plan to cut costs and “reinvent” the business for a low carbon future.
Many layoffs will come from office-based staff, including BP’s core oil and gas exploration and production division, where thousands of engineers, geologists and scientists are set to leave. They will not affect frontline production facilities.
A BP spokesman confirmed the voluntary redundancy figure.
“We are continuing to make progress toward fully defining our new organization. We expect the process to complete and for all staff to know their positions in the coming months,” BP said in a statement.
The oil industry is facing one of its biggest ever crises, with a collapse in demand and oil prices due to the COVID-19 pandemic and pressure from activists and investors to tackle climate change.
In an internal memo this week, BP said that out of 23,600 people eligible for voluntary redundancy, some 2,500 had applied, including about 500 people in senior roles.
“This means around a quarter of the headcount reduction that Bernard outlined in June, will be voluntary,” the memo said.
“We know that for some people for various reasons they feel that now is the right time for them to leave BP — but for many it will still have been a difficult decision,” the memo said.

FASTFACTS

● 2,500 BP employees opt to leave.

● BP to cut 7,500 more employees.

● Move to low carbon future.

Looney has promised to cut oil and gas output by 40 percent by the end of this decade, a radical pledge for an energy company, as he seeks to dramatically expand renewables production such as offshore wind and solar.
Investors have praised the drive, but also questioned the financial viability of the plan as renewables generate much lower returns.
BP’s shares currently trade at their lowest since 1995, when it was a much smaller company, and its dividend yield stands at a staggering 13 percent.
BP said voluntary redundancies were offered to people in offices across 21 countries. Its biggest offices are in London and Aberdeen in Britain, Houston in the US, Baku in Azerbaijan, Luanda in Angola, and Oman and Trinidad and Tobago.
Two BP sources said the company considered more than 10 percent of those eligible accepting voluntary redundancy as a good turnout. Employees were typically offered one month’s salary for every year of service.
Forced redundancies will now be based on internal scores and rankings.
“Losers get a package and will walk out by the end of the year ... Staff choice is brutal,” a source said.
A second source said the biggest challenge would be for the long timers to try to fill new roles requiring skills and knowledge of the renewables business.
“If you are an oil reservoir engineer the chances are just minimal that you can be retrained as a solar panel engineer,” the second source said.
Speaking to Reuters earlier this week, Gordon Birrell, BP’s head of operations, which includes oil and gas production and refining, said many of the jobs cuts would come from his division.
“The transformation of production and operations is significant, very significant — 10,000 people will leave the company and we’re in the midst of the process — a significant proportion of the overall number are from production and operations,” Birrell said. Rival Shell also plans to cut up to 9,000 jobs.


China aims for sustained and healthy economic development

Updated 30 October 2020

China aims for sustained and healthy economic development

  • Beijing to let market forces play decisive role in resources allocation, report says

BEIJING: China is targeting sustained and healthy economic development in the five years to 2025, with an emphasis on a higher quality of growth, the Xinhua news agency said on Thursday, citing the ruling Communist Party’s Central Committee.

President Xi Jinping and members of the Central Committee, the largest of the ruling party’s elite decision-making bodies, met behind closed doors from Monday to lay out the 14th five-year plan, a blueprint for economic and social development.

China’s external environment “is getting more complicated,” the agency said, adding, “There is a significant increase in instabilities and uncertainties.”

BACKGROUND

China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

However, the country’s development was still in a period of important strategic opportunities, despite new challenges, it said.

It added that China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

China will also deepen reforms and let market forces play a decisive role in resources allocation, the agency said.

China will promote a “dual circulation” model, make self-sufficiency in technology a strategic pillar for development, move to develop and urbanize regions, and combine efforts to expand domestic demand with supply-side reforms, it added.

The “dual circulation” strategy, first proposed by Xi in May, envisages that China’s next phase of development will depend mainly on “domestic circulation” or an internal cycle of production, distribution and consumption, backed by domestic technological innovation.