Oil giant BP has warned that plans to streamline its business will cost it $1 billion over the next year. The job cuts could total up in the thousands, Reuters reports.
The changes are part of the company's move to downsize and simplify its operations following $43 billion worth of divestments since the 2010 Gulf of Mexico oil spill.
Chief Executive Bob Dudley said Wednesday the company continues to find ways to "eliminate duplication and stop unnecessary activity that is not fully aligned with the group's strategy."
BP said it is investing in gas projects, typically less exposed to oil prices, which have slumped in the past few months.
"When oil prices fall, there is typically deflation in the industry as a whole," the company said. "Together with its already greater focus on streamlining activity, this would be expected to further help BP align its cost base with its smaller footprint and reduced activity levels."
The company has warned that it will cut more jobs in the head and back offices. BP employs some 84,000 people worldwide, including 15,000 in Britain.
“Although the current environment is challenging, BP is well-positioned to respond and manage our Upstream business for the long term,” BP head of upstream Lamar McKay said in a press release. “We expect to see growth from our conventional and deepwater assets and an increasing contribution from gas. And we also have a quality pipeline of opportunities that we believe are capable of extending underlying growth well beyond 2020. Our focus throughout will remain firmly on safe operations, execution efficiency and greater plant reliability.”