British oil and gas company BP announced Tuesday that it would cut more than 4,000 jobs, 600 of which will be from its North Sea operations, over the next two years as oil prices continue to plummet. BP aims to reduce its global upstream staff from 24,000 by more than 5 percent by the end of 2017, reported USA Today. By the end of 2015, BP reported a toal of around 80,000 under its employ.
"We want to simplify (our) structure and reduce costs without compromising safety. Globally, we expect the headcount in upstream to be below 20,000 by the end of the year," a company spokesman said, according to Reuters.
Upstream operations primarily consist of its exploration and production activities for oil and gas. About 17,000 U.S. employees involved in these operations come from at least half a dozen U.S. states, including Texas, Alaska, Colorado, New Mexico, Oklahoma and Wyoming. However BP declined to comment on how the cuts would impact its U.S. staff.
As for North Sea operations, the ocean area between the U.K. and the rest of Western Europe, the company said it remains committed to operations in the area and would invest $4 billion this year, but due to "the well-documented challenges of operating in this maturing region and in toughening market conditions, we need to take specific steps to ensure our business remains competitive and robust."
"An inevitable outcome of this will be an impact on headcount and we expect a reduction of around 600 staff and agency contractor roles by the end of 2017, with the majority of these taking place this year," Regional President for BP North Sea Mark Thomas said, according to the BBC.
These cuts come as the price of crude oil dropped 5 percent Monday, currently standing around $32 a barrel, which has forced the oil producer to engage in two rounds of spending cuts, with a third announced in October, as it faces its longest period of investment cuts in decades.
BP's fourth-quarter are projected to drop by 84 percent from a year earlier and 48 percent from the previous quarter. It's actual quarterly earnings, as well as its full-year results, will be revealed on Feb. 2.
