UK energy giant BP said it will cut more than 5% of its global workforce, as the company continues a plan to reduce costs as it transitions to more operations outside of its oil and gas business.

The London-based multinational group on Jan. 16 said it would lay off about 4,700 workers, and also cut about 3,000 contractor positions, this year. It did not detail how many jobs would be lost in specific countries across its operations. The company on Thursday said about 2,600 of those contractor positions have already been eliminated. The company has about 90,000 workers worldwide.

BP staff were notified about the job cuts in an email. Murray Auchincloss, BP’s chief executive, last year said he wants to simplify the business. Auchincloss is expected to discuss his strategy during the company’s investor day on Feb. 26. Investors have been concerned about the company’s plans to reduce the amount of oil and gas it produces, and its efforts to increase investments in renewable energy. The company has said it wants to support more digitization of its operations, and use more artificial intelligence in marketing and engineering.

BP in a statement Thursday said: “Last year [2024] we began a multi-year programme to simplify and focus BP. We are strengthening our competitiveness and building in resilience as we lower our costs, drive performance improvement and play to our distinctive capabilities.

“To deliver this, a series of programmes are in place in businesses throughout BP. Today, we have told staff across BP that the proposed changes that have been announced to date are expected to impact around 4,700 BP roles—these account for much of the anticipated reduction this year. We are also reducing our contractor numbers by 3,000. As our transformation continues our priority will—of course—be safe and reliable operations and continuing to support our teams.”

‘Position BP to Grow’

Auchincloss in the email to staff wrote: “We have got more we need to do through this year, next year and beyond, but we are making strong progress as we position BP to grow as a simpler, more focused, higher-value company.” The company is understood to have set a target to reduce costs by about $2 billion by the end of next year, and wants to save at least $500 million this year.

Auchincloss wrote that he is aware of “the uncertainty this brings for everyone whose job may be at risk, and also the effect it can have on colleagues and teams.” Company officials, who have conducted a review of all of BP’s divisions, already have said the multi-year plan to reduce operating costs could result in more job cuts. Auchincloss said the company’s focus on “our highest-value opportunities” has resulted in pausing or stopping at least 30 projects since June of last year.

Investors were wary of the company’s plans, announced in 2023, to reduce its oil and gas production by 2030. BP’s previously announced target of lowering its emissions by as much as 40% across its operations by 2030 has been revised downward, with officials now looking at a 20% to 30% reduction, while maintaining investment in fossil fuels.

Auchincloss said the company is still “uniquely positioned to grow value through the energy transition” to renewables. “But that doesn’t give us an automatic right to win. We have to keep improving our competitiveness and moving at the pace of our customers and society,” he said. Auchincloss took over as BP’s CEO in 2023 after the resignation of Bernard Looney in September of that year. Looney left after it was discovered he had failed to disclose relationships with employees.

Cuts in Technology Group

Reuters reported Thursday that a separate memo sent by Emeka Emembolu, leader of BP’s technology division, to his group said about 1,100 jobs would be cut by eliminating redundant positions, and through moving work from the UK and the U.S. to India, Malaysia, and Hungary.

Thursday’s announcement of job cuts comes just days after BP delayed an investor event. That meeting, scheduled for Feb. 11 in New York City, was postponed to allow time for Auchincloss to recover after a medical procedure, according to the company. The investor meeting now is scheduled to be held in London on Feb. 26.

BP in September of last year announced it would sell its U.S. onshore wind business, BP Wind Energy, which included wind assets in eight states that were managed from a center in Houston, Texas.  BP employs about 4,000 workers in at its U.S. headquarters in Houston.

—Darrell Proctor is a senior editor for POWER.