bps structure on the chopping block

CEO Hayward revealed plans to scale down company.

BP Plc has created and unveiled a new plan to streamline its structure. The new plan will slash the amount of business units and do away with management layers, thanks to a poor financial performance that has left the Big Oil company behind the competition, according to the Associated Press.

CEO Tony Hayward’s is issuing the restructure in an attempt to restore BP’s advantage against its competitors after a number of safety and operational problems.

“BP’s performance has materially lagged our peer group in the last three years,” Hayward said in a worldwide message to staff that was also issued to the London Stock Exchange. “It has been poor because we are not consistent and our organization has grown too complex. At the root of all this is a need to change our behaviors.”

Once in effect, the new plan will start with cutting the number of BP’s main business segments from three to two. The company will consolidate the existing gas, power and renewables business into the two remaining units: exploration and production, and refining and marketing. It will also shrink down the alternative energy division.

Hayward said the decision came after the business structure was “rigorously reviewed,” with the result that up to four layers of management will be shed in some parts of the company. He added that job losses would be inevitable, with the head off being cut by as much as 25%

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