BP to Cut 5,000 Jobs in Effort to Reduce Overhead by 15-20%

BP's CEO Tony Hayward held a press conference Feb. 5 to discuss the company's fourth quarter and full year results for 2007. Stating that 2007 was one that he and others at the company are happy to have left behind, he acknowledged that their 2007 financial results were less than stellar, falling 22% to $17.3 billion.

"The main reason for this was a disappointing performance from our US refining operations," he said.

Noting several achievements, such as the expected start up of Thunder Horse by the end of 2008, as well as six start ups in the second half of 2007, Hayward then moved to the company's Forward Agenda, "designed to restore BP's competitive financial performance."

"On the reduction of complexity agenda, we have announced a number of changes to create a fundamental shift in how BP works," Hayward said.

He revealed that BP's plan is to reduce corporate overhead by 15 to 20%. "We are starting from the top with fewer layers of management and smaller corporate infrastructure," he said.

BP plans to cut about 5,000 positions in the company by the middle of 2009. The company already reduced its workforce by 9,500 with the sale of its U.S. convenience store business.

The restructuring costs were approximately $350 million in the fourth quarter of 2007, but the company expects an additional $1 billion in 2008.

"We expect to see benefits from these measures in 2009 and beyond," he stated.

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