SHAFAQNA (Shia International News Association)- Oil giant British Petroleum (BP) is reportedly set to cut hundreds of jobs, mostly in the UK and the US, over the recent downward spiral of oil prices.
The cuts will affect middle managers among others.
“What you’ll see with this simplification plan is that headcounts are starting to come down across all of our activities in upstream, downstream and in the corporate centers – essentially the layers above operations,” BP finance director Brian Gilvary told the Sunday Times.
Gilvary said it was unlikely falling oil prices would affect the company’s long-term plans, but some projects could be delayed or scrapped, adding that “we have got flexibility to trim into next year if that’s what we need in a new world of oil at $70 or $60 (a barrel).”
BP has 84,000 employees worldwide, 15,000 of whom are based in the UK and 20,000 in the US.
The company is still reeling from the litigation costs related to the Gulf of Mexico spill by one of its subsidiaries in 2010, which had a significant impact on it.
In November, BP lost a bid for a new trial on findings that it was grossly negligent in the 2010 Gulf of Mexico oil spill. This loss came after a string of legal setbacks for the company, including failed efforts to cut the cost of its settlement with spill victims.
For the third quarter of 2014, BP reported replacement cost profits of $2.4 billion, down from $3.2 billion in the same period last year.
The company is expected to outline details of the job cuts on December 10.
This comes as oil prices have hit a new low over disappointing reports of the markets.
The Brent North Sea slumped to USD 67.35 a barrel on Monday, while the US West Texas Intermediate (WTI) fell to USD 64.71, down USD 1.13 from the last close of markets. The fall is a new 5-year low for Brent crude which some say is due to the oversupply in the market.