The British energy giant Bp, one of the historic members of the “Seven Sisters” in the oil sector, has announced an important renovation: lay off approximately 7.700 people, equal to 5% of its global workforce, as part of a 2 billion cost-cutting plan of dollars. An inevitable move to try to remain competitive in an increasingly challenging market, but the news is that theartificial intelligence (IA) will play a crucial role in this rationalization process. This decision, communicated by the CEO Murray Auchincloss, is part of a broad cost reduction strategy necessary to maintain the company's global competitiveness. Despite this, the Bp title rose 1,7% to 436,10 pence on the London Stock Exchange.
BP's Big Bill: Decarbonization and Climate Change Adaptation
I layoffs are part of a broader strategy that aims to reduce costs and make Bp more competitiveThe company is faced with the challenges of the transition towards a low-carbon economy. Growing pressure to reduce greenhouse gas emissions and adapt to new global regulations on climate change are key factors in the change of course of the British oil giant. In its internal communication, Auchincloss announced that in addition to the 4.700 permanent employees, will be fired also 3.000 contractors, in an effort to streamline costs. BP currently employs about 90 people globally, but the company has already said it could lay off more workers in the coming years in an effort to further reduce costs.
Artificial intelligence at the service of cuts
But there is a novelty that makes this renovation even more interesting: the use of theintelligence artificial. The English company has announced that a part of the layoffs will be determined by the use of AI, a technology that will help reduce staff more precisely and efficiently, optimizing business processes. In other words, if once cuts were decided by human managers, today the final decision could be influenced by an algorithm. And not only to cut costs, but also to improve competitiveness in the long term, making the company more agile and less dependent on human resources. AI thus enters fully into the decision-making process, rewriting business dynamics.
Renegotiating the Green Strategy: Back to Fossil Fuels?
In addition to digitalisation, BP is reviewing its renewable energy strategy: since June last year, the company has 30 projects suspended, focusing only on the most profitable ones, with the aim of saving resources to reinvest in promising initiatives. In detail, these are investments in key areas such ashydrogen, the fuels be sustainable for aviation (Saf) hey wind farms. This marks a return to a more conservative approach, with greater attention to fossil fuelsThe English oil giant is therefore trying to realign itself with the market, placing greater attention on Petroleum and on natural gas, the sectors that have historically guaranteed the highest profits.
The Difficult Legacy of Bernard Looney
The English company finds itself having to deal with Bernard Looney's Legacy, former CEO, who had launched a strategy of transition towards low-carbon energy. His forecasts on the peak oil consumption they revealed themselves incorrect and investments in offshore wind energy they revealed themselves expensive. His abrupt exit in September 2023 on conduct grounds (due to internal romantic relationships within the company) blocked the implementation of his vision, and BP has since slowed down its transition to renewables. But it was not enough, the financial results speak clearly: in the third quarter of 2024, revenues fell by 10% and profits collapsed by 95%. Competition in the renewables sector and the volatility of oil prices are putting a strain on the company.
Bp: Future prospects and the need for radical change
The cost-cutting plan, which aims to save $2 billion by the end of 2026, is just one part of a broader strategy to reposition the company. However, the future outlook remains uncertain. Despite measures to improve competitiveness, BP remains behind its main rivals. capitalization BP's market value is around £82,86 billion (five years ago it was over £100 billion), less than the half of that of Shell, which stands at 204 billion. This gap has prompted some investors to call for radical change, particularly a more decisive return to fossil fuels, although this seems difficult to achieve in the short term.