Global energy giant BP said it would cut thousands more jobs by the end of this year, as the company continues to reduce its renewable energy plans to focus more on its longtime core business of oil and gas production. UK-based BP, which has its U.S. headquarters in Houston, Texas, has said it plans to eliminate 6,200 positions this year, and also expects to end work agreements with more than 4,000 contractors by year-end. The company said it already has slashed 3,200 contractor roles since January, and this week said it would “continue to rigorously review the remaining contractor activity across our businesses and functions.” The company earlier this year said it expected to lay off as many as 4,700 workers this year. The company's Houston operations employ about 4,000 people, the highest number in any of its worldwide locations. BP said its corporate layoffs amount to about 15% of its global workforce, as the company seeks to reduce costs by about $2 billion by the end of 2025. The company earlier this year said it would cut 5% of its global workforce as part of a restructuring effort. Officials have said BP employs about 100,000 workers in various roles worldwide. Kate Thomson, the company's CFO, confirmed the job cuts during the company's second-quarter earnings call. Thomson said most of those layoffs will occur in the fourth quarter of this year. The company has said the reductions in workforce are not due to financial problems, but rather focused on increasing returns for investors and returning to its roots in oil and gas exploration. BP recently discovered new oil and gas fields off the coast of Brazil, which officials said should increase the company's fossil fuel production. The discoveries have been called the company's biggest in at least 25 years. Thomson said that so far this year BP has achieved $1.7 billion in cost reductions, including $400 million from corporate overhead. The executive said “performance culture” changes across the company have contributed to the savings. BP executives have said the company's goal is to cut structural costs by as much as $5 billion by year-end 2027.
“You just never plan on this amount of success, so we need to think about resource allocation,” said Murray Auchincloss, CEO of BP. The company recently said it is targeting $4 billion to $5 billion in cost reductions against its 2023 baseline. Officials said BP already has achieved $1.7 billion in cuts, along with selling off $3 billion of its assets. BP is not abandoning renewable energy. BP and JERA, Japan’s largest power generation company, earlier this week announced the completion of JERA Nex bp, a joint venture (JV) that combines each companies’ offshore wind assets to form a new equally-owned renewable joint venture. The companies said the new joint venture has a net potential generating capacity of 13 GW, which would establish it as one of the largest offshore wind developers, owners and operators globally. BP in February of this year said it would provide more capital to its oil and gas business, and reduce its renewables business to less than 5% of the company’s capital expenditures. The company last month said it would sell BP Wind Energy, its U.S. onshore wind business, to LS Power, an energy infrastructure developer. William Lin, the company's executive vice president for Gas & Low Carbon Energy, said the new JV with JERA “allows BP to optimize and decapitalize our low carbon energy portfolio as we continue to maintain optionality for electron flows and more material value realization through this decade and the next.” The JERA Nex bp JV includes projects either being developed or in operation across nine countries. The portfolio includes 1 GW of operating generation capacity, 7.5 GW of projects in development, and another 4.5 GW of secured leases. The companies in December of last year said they would together provide $5.8 billion in capital for the JV through the end of 2030. “JERA Nex bp begins life with a strong operating portfolio and an extensive development pipeline. We bring together two highly capable teams with the experience, relationships, purchasing power and unique global access of two of the East and West’s pre-eminent energy companies. This gives us the expertise and experience to find new ways to create value from offshore wind and become one of the world’s leading companies in the sector,” said Nathalie Oosterlinck, CEO of JERA Nex bp. JERA and BP have been building offshore wind projects since 2019. BP is currently developing projects off the UK coast in the Irish Sea, along with installations in Germany’s North Sea. It also has secured leases off Scotland and the U.S. East Coast. JERA acquired Belgium-headquartered offshore wind group Parkwind in 2023. It subsequently launched the JERA Nex renewables group, which owns and operates wind farms in Belgium, Germany, Japan, and Taiwan, and also has a development portfolio of projects in areas that include Japan, Ireland, and Australia. The two companies also operate JERA Nex bp Japan, which is focused on developing and operating projects in that country. —Darrell Proctor is a senior editor for POWER.
