BP freezes pay in 2015 to cut costs

BP is freezing base pay across the group this year, the latest in a series of steps by oil majors to cut costs in response to sinking oil prices.

Over the past year, oil majors have been selling assets to protect cash flows and shareholder dividends.

Many have accelerated cuts in capital and operating expenditures, including freezing some projects, as crude prices more than halved since June to below $50 per barrel.

Salaries in the oil sector are a major part of operating expenses. BP employed 83,900 employees in 2013 and paid them around $13.6 billion in benefits, including wages and pensions.

“The tougher external environment in 2015 means that our businesses and functions need to work to take a number of measures in response to the harsh trading environment,” Chief Executive Bob Dudley said in a message to staff.

“One of the measures we are taking across the group is a general freeze to base pay for 2015, with only a few exceptions for specific circumstances around the world,” Dudley added.

In December, BP announced a $1 billion programme to cut thousands of jobs globally, including its UK North Sea operations.