British oil and gas company BP has announced plans to terminate 4,000 employees or approximately 5% of its global workforce.
The company on Tuesday says it aims to reduce its global oil production, or upstream, headcount by 4,000 to 20,000 as it undergoes a $3.5 billion restructuring program. The company said total headcount at the end of 2015 was 80,000.
Crude oil prices have fallen below a 12-year low of $32 a barrel, forcing the world’s larges oil and gas producers to dramatically cut spending.
“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.
BP will reduce headcount by 600 people over in the North Sea over the next two years with most cuts likely in 2016.
BP shares have taken a big hit. Since oil prices started sliding in mid-2014 the company has lost 40% of its value.
The company is also still faced with $20 billion in fines resulting from its deadly 2010 Gulf of Mexico oil spill.
In October 2015 the company announced spending cuts and plans to limit its capital spending to $17 to $19 billion per year through 2017.
BP has sold more than $50 billion of assets in recent years in order to cover the spill costs.
Fourth-quarter upstream earnings for oil majors are expected to fall by 84% year-over-year and 48% from the previous quarter.