On December 8, BP announced that they would be cutting a number of positions in management, which would amount to hundreds, and potentially thousands, of jobs across their infrastructure. BP currently has approximately 84,000 employees around the world, and the majority of the job cuts will occur in the back office and middle management rather than on the actual rigs. The company says that they are reworking their corporate structure, and that this was something they’d been considering for several months.
They say that they want their corporate structure to be in line with the reality of the company today. It is smaller than it was a few years ago, but the corporate positions did not reflect that and was the main reason that the employees needed to go. Other large oil companies have faced similar cutbacks in recent months. Royal Dutch Shell, Chevron, and Statoil ASA all announced cuts.
Despite letting a number of employees go, BP still feels that it is in a good position and that it will see growth from both their deep-water rigs and their conventional assets. They do admit that the current climate for oil and gas might seem a bit bleak, but they are looking at the long-term, and feel that they will be able to come through relatively unscathed.
Part of their long-term plan is the aforementioned restructuring, which they are starting now. Management may well be just the first of the areas to experience these cuts. With potentially thousands of jobs on the line, it’s interesting to see just where those cuts might take place. With the dropping price of oil, will BP actually slow their exploration and drilling efforts, or will they continue to seek out new sources of oil?
The company has a number of assets and works in more than just oil. They are also working in a variety of gas ventures as well, and they find that these do not have quite as many of the fluctuations, keeping them relatively stable.
BP is easily one of the largest and most recognizable names in the oil industry, and seeing that they are struggling, despite their optimism, should make other companies take note. Job cuts may be necessary in the coming months for many more businesses if the prices do not pick up. However, cutting jobs should not be the only remedy. Oil producers should also look into investing in better equipment to become more efficient, which could help them curb costs.
Oil Works, Inc. is a complete drilling rig equipment manufacturer and service provider based in the Permian Basin for over 20 years. OWI’s product and service offerings include Derricks, Substructures, Drawworks, Mud Systems, Walking Systems, Power Generation, Control Systems, Iron Roughnecks and complete Rig Solutions built to API and ISO standards. OWI is also proud to offer 24/7 Service and Support.
