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

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

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.


Madinah industrial investment opportunities highlighted during official tour

Deputy Minister Osama bin Abdul Aziz Al-Zamil on Thursday inspected a number of industrial facilities in Madinah and Yanbu. (Supplied)
Updated 05 December 2020

Madinah industrial investment opportunities highlighted during official tour

Deputy Minister Osama bin Abdul Aziz Al-Zamil on Thursday inspected a number of industrial facilities in Madinah and Yanbu. (Supplied)
  • Deputy minister of industry of mineral resources conducts tour of factories, meets stakeholders

JEDDAH: The deputy minister of industry of mineral resources conducted a tour of factories in Madinah region, as part of the ministry’s efforts to investigate the challenges and opportunities within the area’s industrial sector.

Deputy Minister Osama bin Abdul Aziz Al-Zamil on Thursday inspected a number of industrial facilities in Madinah and Yanbu, where he met with investors to discuss potential opportunities.

The Madinah region ranks fifth in the Kingdom in terms of the number of factories, with 312 in total. The region also ranks fourth in terms of its investment share worth, which is valued at SR109.9 billion ($29.3 billion).

Madinah is home to 61 percent of the region’s factories; Yanbu is in second place with 35 percent, and Al-Ula in third place with 1 percent.

In terms of the current levels of investment so far, chemical activity accounts for the bulk, with 56 percent, oil and coke representing 16 percent, non-metallic minerals activity 15 percent, and other activities constituting about 13 percent of the total capital invested in the region.

Al-Zamil reviewed the services provided by the Saudi Authority for Industrial Cities and Technology Zones (MODON) where he held discussions with officials, industrialists and workers from the governorate.

During his inspection tour in Madinah, Al-Zamil visited a number of factories, including Itqan Food Industries, the House of Granite Factory, and the National Factory for Elevators.

As part of the visit, Al-Zamil also had a meeting with officials from the Madinah Chamber of Commerce and Industry, where he met with the chairman of the chamber’s industrial committee.

The visit included a visit to the Yanbu National Petrochemical Company (Yansab), which came during meetings held with officials from the Yanbu Chamber of Commerce and Industry and the Royal Commission for Jubail and Yanbu (RCJY)

The tour is part of the ministry’s initiatives to develop the sector and improve its investment environment, in order to achieve the goals set out as part of the Kingdom’s Vision 2030.