Just days after The Fed admitted “we got it wrong” on the “unequivocally good” low oil prices, BP has joined a long list of energy entities slashing jobs. The oil company will cut 4,000 jobs in exploration and production because of toughening market conditions “we need to take specific steps to ensure our business remains competitive and robust.”
As Fed’s Williams recently admitted:
The Fed got it wrong when it predicted a drop in oil prices would be a big boon for the economy. It turned out the world had changed; the US has a lot of jobs connected to the oil industry.
BP Chief Financial Officer Brian Gilvary noted the company’s restructuring efforts started on the corporate side two and a half years ago, where it saw significant headcount reductions in both employees and contractors.
“You’re also seeing significant headcount reductions in upstream and downstream as we progress through the year and I think you’ll see more of that before we get to the end of the year,” Gilvary said.
The further weakness in oil prices has push BP to today’s announcement confirming “significant” layoffs to come… (as AP reports)Oil company BP is cutting some 4,000 jobs in exploration and production over the next two years amid sharp drops in the price of crude.The cuts in BP’s upstream business globally will include the loss of some 600 jobs in the North Sea.The cost-cutting announced Tuesday comes as the price of oil dropped to a 12 year-low near $31 a barrel. Part of the decline is due to concern over a drop in demand in China, which is depressing commodity prices worldwide.Company officials began notifying employees of the action in town hall meetings in Scotland.Mark Thomas, regional president for BP North Sea, says in a statement that because of toughening market conditions “we need to take specific steps to ensure our business remains competitive and robust.”
The cuts include 600 people working at North Sea projects: they’ll lose their positions over the next two years “with the majority in the first year,” he said.
The job losses add to the 4,000 positions cut by BP last year as it hunkers down for a prolonged period of lower prices. Crude’s slump has been brutal for oil companies as revenue and profit drop, projects are postponed and thousands of employees are fired.
- *BP AIMS TO HAVE HEADCOUNT BELOW 20,00 BY YEAR END: REUTERS
So yes, dear Fed, you got this wrong as you finally admitted. Very, very wrong. But that’s ok – just keep on supporting the S&P500, surely nothing wrong can possibly happen there…