By Ron Bousso
LONDON (Reuters) -BP will cut more than 5% of its global workforce, it said on Thursday, as part of Chief Executive Murray Auchincloss’ efforts to cut costs and rebuild investor confidence in the energy giant.
About 4,700 employees and 3,000 contractor positions will be cut this year, BP (NYSE:) told Reuters. The cuts were announced in an internal memo seen by Reuters earlier on Thursday.
BP shares were up 1.8% at 1110 GMT.
Auchincloss said last year it would cut the British company’s costs by at least $2 billion by the end of 2026 to boost returns and address investor concerns about its energy transition strategy.
He was also seeking to restore trust following the abrupt resignation of his predecessor Bernard Looney in September 2023 for failing to disclose his relationships with employees.
The job cuts follow reviews of all BP divisions. The exact breakdown of the cuts was not disclosed. BP has a workforce of around 90,000 people.
“We have more to do this year, next year and beyond, but we are making great progress as we position BP to grow as a simpler, more focused and higher-value company,” Auchincloss said in the memo.
The group’s shares have underperformed most of its rivals over the past year, falling more than 5%, similar to French rival TotalEnergies (EPA:) and compared to a gain of 5.5% for Shell (LON:) and Exxon Mobile (NYSE:) 14% gain.
Auchincloss, who took over a year ago, will outline his new strategy at an investor day on February 26.
He has already taken important steps to reverse his predecessor’s strategy of moving away from oil and gas.
As part of the new effort to reduce exposure to renewable energy, BP and Japanese power generator JERA agreed last month to join forces to form one of the world’s largest offshore wind operators.
Rival Shell has also made reductions to its workforce in recent years as part of Chief Executive Wael Sawan’s cost-cutting drive. These include a 20% reduction in its oil and gas exploration division and cuts to its low-carbon division.
BP will release its fourth-quarter and full-year results on February 11.