BP to spend $1 billion on hundreds of job cuts, restructuring

By Reuters

Dec 10, 2014 07:16 AM EST

BP will cut hundreds of jobs across its global oil and gas business by the end of next year in a $1 billion restructuring program announced on Wednesday following steep falls in oil prices.

The bulk of the costs will go towards staff redundancies in all segments, including oil exploration and production, refining and trading and administration, a company spokesman said.

The British oil major said a first charge will be taken in the fourth quarter of 2014 as it implements a plan drawn up over the past 18 months to increase efficiency.

"As part of its wider ongoing group-wide program to simplify across its Upstream and Downstream activities and corporate functions, it expects to incur non-operating restructuring charges of circa $1 billion in total over the next five quarters, including the current quarter," BP said in a statement.

Hundreds of jobs are expected to be cut in BP's main centers in Britain, the United States and elsewhere, sources said.

The restructuring charge is part of BP's cost cutting drive in recent years that saw it sell over $43 billion worth of assets to cover the cost of the 2010 Gulf of Mexico oil spill as well as the oil sector's rising costs.

A sharp drop in oil prices, that fell from around $115 a barrel to around $65 a barrel since June, has piled further pressure on BP and its peers as revenues slump.

By 0518 ET, BP shares were down 0.2 percent at 405.20 pence per share.

BP is also considering further cuts to its 2015 spending program beyond the $1-$2 billion reduction announced in October, that brought forecasts down to $24-$26 billion.

"This will be reviewed further as part of the 2015 plan, recognizing the current outlook for oil prices," it said.

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