BP to Cut 5,000 Jobs

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BP to Cut 5,000 Jobs

LONDON -- In a statement of BP plc's fourth-quarter financial results, the major oil company gave additional details of its restructuring plan announced by chief executive Tony Hayward, which include the reduction of 5,000 jobs by the middle of next year and a planned 15 to 20 percent cut in corporate overheads, the Financial Times reported.

The move, which will cost $1 billion in 2008, represents about 5 percent of BP's workforce of approximately 97,000 employees, the report stated. An additional 9,500 jobs will transition off BP's payroll from the sale of its U.S. convenience stores, according to the report.

Also in the report, the company raised its quarterly dividend by 31 percent to reflect "the company's increasingly robust view of the future," despite missing analysts' estimates of its fourth-quarter profit by $500 million. BP generated $4 billion in profit, a 53 percent increase compared to the year-ago period, according to a Bloomberg News report.

The fourth-quarter profit excludes "non-operating" charges of $1.03 billion related to the sale of 700 U.S. convenience stores and other restructuring costs, according to the Financial Times report.

In other BP news, the company must wait at least two weeks to learn the amount of money it must pay to resolve criminal charges linked to the death of 15 workers from a March 2005 explosion at the company's Texas City, Texas refinery, a separate Bloomberg News report stated.

After hearing statements and legal arguments in support and opposition to BP's plea, U.S. District Judge Lee Rosenthal gave lawyers two weeks to file additional briefs, strictly limited to arguments of what victims' losses can be linked to BP's criminal conduct, such as out-of-pocket expenses including medical bills, funeral expenses, lost wages and property damage, according to the report. After reading the briefs, Rosenthal will accept or reject the plea deal, Bloomberg News reported.

Victims urged Rosenthal to reject the plea, calling the deal inadequate to prevent BP from further safety violations, the report stated.

Meanwhile, BP asked the judge to accept the plea deal, which includes three years of probation, as punishment for air-pollution violations that resulted from the deadly explosion, according to the report. In court filings cited by Bloomberg News, the company stated it spent more than $1 billion and pledged billions more to upgrade and repair the refinery to meet industry standards.

"We cannot change the past nor undo the harm done by the explosion and fire,'' Keith Casey, current plant manager at the Texas City refinery, said at a hearing cited by Bloomberg News. "Instead, we have worked with state and federal agencies to determine what went wrong, to share what we have learned and to prevent something like this from happening again.''

Yesterday, Rosenthal reminded lawyers she doesn't have the authority to alter the plea deal or substitute the multibillion-dollar penalties that victims urged her to assess on the company, the report stated.

"I'm not authorized or permitted to insert myself into the plea bargaining process,'' she said. "I must not evaluate a hypothetical plea that hasn't been entered or that someone else, or indeed one that I, might prefer.''

The victim's lawyer, Brent Coon, told Bloomberg News the fine based on the losses would "far exceed the number they have now."

"I estimate it would be in the hundreds of millions of dollars, at minimum,'' Coon told Bloomberg News.

CSNews Online previously reported BP plc spent the entirety of its $1.6 billion fund it set aside to pay for claims from its Texas City, Texas, refinery explosion.