Chevron, BP, Total Set to Sack Workers

By Adedapo Adesanya

Oil giants are downsizing their workforce after suffering losses due to the global slump in demand for oil because of the coronavirus crisis.

British oil company, BP Plc, on Monday, June 8 announced plans to cut 10,000 jobs due to the global slump having paused redundancies during the peak of the pandemic, but told staff today that around 15 percent will leave by the end of the year.

BP Chief Executive Officer, Mr Bernard Looney, blamed a drop in the oil price for the cut, saying, “The oil price has plunged well below the level we need to turn a profit.”

“We are spending much, much more than we make – I am talking millions of dollars, every day,” he added.

However, not only BP is doing some cropping as French oil and gas outfit, Total, may also downsize its workforce after the company suffered a whopping $12 billion deficit in its revenues forecast.

The company has stated its plan to adopt a cost-cutting mechanism to match the deficit, while maintaining that it anticipates a $12 billion revenue shortfall due to a fall in oil prices caused by the COVID-19 outbreak.

Chevron is also one of the major oil giants that have suffered revenue shortfall. It had already announced the plan to sack over 6,000 staff in its global operations.

The latest announcement of $12 billion deficit by Total CEO, Mr Patrick Pouyanne, is significantly higher than a previous deficit forecast of $9 billion. The increase is expected to force Total to devise deeper cost-cut measures.

According to Mr Pouyanne, Total had expected oil prices to stand at around $60 per barrel this year, but with prices currently at around the $30 per barrel during its forecast, the company faces a much bigger shortfall.

“It is globally at least $12bn that we believe we must cover through our action plan due to the crisis,” Mr Pouyanne, said in an interview with Reuters.

The oil and gas industry has been regarded as one of the worst-hit sectors globally with oil revenues dwindling beyond expected margins while workers disengagement continues.

The COVID-19 pandemic impact has shattered the crude oil demand as the majority of the oil and gas services end-user industries witnessed a slowdown amid lockdowns.

It has been estimated by analysts that the current damage caused in the sector by the coronavirus pandemic will lift in 2021 as the global economy is expected to face a -3 percent contraction this year.