BP (NYSE: BP) is deepening its cost-cutting drive, now eyeing an additional 3,400 job cuts after laying off 3,000 contractors in Q1, as the oil major grapples with a sharp 49% decline in quarterly profit and mounting pressure to deliver free cash flow.
The move, facilitated by AI software from Palantir (NYSE: PLTR), underscores the company’s rapid shift away from its failed renewables pivot and toward a leaner, oil-focused model.
“We’re using Palantir to help us go role by role… allowing us to really rip through it pretty quickly,” CFO Kate Thomson confirmed. The layoffs come on top of nearly 4,700 permanent job eliminations and over 3,000 contractor role reductions announced in January, amounting to one of the steepest workforce reductions in BP’s history.
The cost-cutting campaign coincides with deteriorating financials. Adjusted profit plunged to $1.38 billion in Q1, well below analyst expectations, marking the third miss in five quarters.
Meanwhile, net debt swelled by $4 billion in Q1 to reach $27 billion. Management reiterated its plan to divest $3–4 billion in assets this year and cut debt to as low as $14 billion by end-2027. A $750 million share buyback—down sharply from $1.75 billion last quarter—barely met the bottom range of analyst expectations.
Shares fell over 4% in London trading and are now down 14% year-to-date.
Despite the profit collapse, CEO Murray Auchincloss praised the company’s “great operational performance,” citing six consecutive exploration discoveries and record efficiency in oil and gas output. However, Auchincloss conceded that “lower oil prices than we planned” and gas trading issues had significantly pressured earnings.
BP is now operating with a Brent crude price assumption of $71.50 per barrel, while the actual price hovered at $65 this week. To adapt, the company has trimmed 2025 capital spending by $500 million and aims to generate $20 billion in free cash flow by 2027—goals influenced in part by activist investor Elliott Management’s demands for sharper discipline.
Further complicating BP’s pivot, head of strategy Giulia Chierchia, a key architect of the renewables-focused agenda, will leave in June and not be replaced. Her absence during the February strategy reset marked a symbolic end to the company’s short-lived transition into green energy.
Information for this briefing was found via Financial Times and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
