Procurement's Key Role in bp Cost-Saving Programme

bp, one of the world’s leading oil and gas companies, is undertaking significant workforce reductions as part of a strategic cost-saving initiative. The move comes as the energy giant seeks to streamline operations and reduce costs by £1.6bn (US$2bn) by the end of 2026.
This cost-cutting effort is a critical part of CEO Murray Auchincloss’ broader goal to simplify the business, strengthen competitiveness and enhance procurement and operational efficiency.
Employing more than 87,800 people globally, bp will see a 5% decrease in its total workforce through the elimination of 4,700 employee roles and 3,000 contractor positions.
These cuts, announced on 16 January, mark a substantial shift in the company’s operations, with procurement functions playing a pivotal role in delivering the expected savings.
bp’s cost-cutting strategy
Despite its position as one of the most profitable players in the oil and gas sector, bp is focusing on reducing costs to remain resilient in a challenging energy market.
A key component of this strategy is optimising its procurement processes. By simplifying internal structures and revisiting supplier relationships, bp aims to ensure it is not only cutting costs but also maintaining efficiency across its supply chain.
In a statement addressing staff, bp highlighted the importance of this restructuring: “Last year, we began a multi-year programme to simplify and focus bp. We are strengthening our competitiveness and building in resilience as we lower our costs, drive performance improvement and play to our distinctive capabilities.
“To deliver this, a series of programmes are in place in businesses throughout bp.
“Today, we have told staff across bp that the proposed changes that have been announced to date are expected to impact around 4,700 bp roles — these account for much of the anticipated reduction this year. We are also reducing our contractor numbers by 3,000.
“As our transformation continues our priority will, of course, be safe and reliable operations and continuing to support our teams.”
Steering the transformation
Murray Auchincloss, bp’s CEO since January 2024, is at the forefront of the transformation. With 25 years of experience at bp, including his previous role as CFO, Murray brings a deep understanding of the financial and operational challenges the company faces.
Helge Lund, Chair of bp, expressed confidence in Murray’s leadership at the time of his appointment: “The board is in complete agreement that Murray was the outstanding candidate and is the right leader for bp.
"His assured leadership, focus on performance and delivery and deep understanding of the opportunities and challenges in the energy transition will serve bp well as we continue our disciplined transformation to an integrated energy company.”
Murray adds: “It’s an honour to lead bp – this is a great company with great people. Our strategy, from international oil company to integrated energy company, does not change. I’m convinced about the significant value we can create.
“Now, more than ever, our focus must remain on delivery: operating safely and efficiently, executing with discipline and always focusing on returns. This is how we will deliver real benefits for our customers and other stakeholders and continue to grow long-term value for bp’s shareholders.”
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