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BP to Embrace Digital Working, Diminish Office Footprint

Zacks Equity Research
·3 min read

BP plc BP is reportedly planning to reduce the property portfolio with the help of the remote working culture in the wake of the coronavirus pandemic. The work-from-home trend has proven effective in the times of the pandemic and the company will likely incorporate this in its office space allocation planning.

The reconfiguration process of the company’s offices all around the globe is expected to halve its property portfolio in several locations. It has operations in 79 countries with more than 70,000 employees, of which around 50,000 will be allowed to work remotely. Moreover, the company stated in June that it might reduce workforce by 15% or 10,000 personnel. The move might free up office space and reduce related costs for the company at a time when economic downturn has severely affected its financial position.

The company is likely to finalize a proper plan for its office space usage over the coming few months. The office space reduction will likely come in the form of selling or not renewing leases, which will enable it to shed some costs and increase efficiencies. This property downsizing move is expected to be the most dramatic one in the company’s more than 100 years history, per the Guardian.

Its embracing of the digital working environment and reducing office footprint can be part of the reinvention process, which was announced last February. BP’s new CEO Bernard Looney, who took over from Bob Dudley, revealed plans to halve carbon intensity of its products by 2050 or sooner. The company intends to install methane measurement at major hydrocarbon processing sites within the next three years.

Notably, BP is not the only energy company making such moves. Oilfield service provider, Halliburton Company HAL has reportedly decreased workforce at the headquarters by 1,000 people in early-May and is looking for reducing the real estate portfolio.

Price Performance

BP’s shares have lost 4.4% in the past three months compared with 1.8% decline of the industry it belongs to.

Zacks Rank & Stocks to Consider

BP currently has a Zacks Rank #4 (Sell). Some better-ranked players in the energy space include Royal Dutch Shell plc RDS.A and Noble Energy, Inc. NBL, each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shell’s bottom line for 2021 is expected to rise 112.5% year over year.

Noble Energy’s bottom line for 2021 is expected to surge 58.5% year over year.

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Noble Energy Inc. (NBL) : Free Stock Analysis Report
Halliburton Company (HAL) : Free Stock Analysis Report
BP p.l.c. (BP) : Free Stock Analysis Report
Royal Dutch Shell PLC (RDS.A) : Free Stock Analysis Report
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