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LONDON -- BP's new chief executive Tony Hayward prepared employees for a far-reaching shakeup of the oil company, as he delivered a blunt warning that third-quarter revenues would be "dreadful," the Financial Times reported.
Hayward told a staff meeting in Houston that he will be announcing a streamlining of the company's organization next month. He said BP's financial performance was at its lowest since the crisis of 1992-1993, according to the Financial Times.
His remarks, which were made to a "town hall" meeting and summarized by a BP manager in a note circulated to colleagues under the heading "BP Confidential," show how Hayward hopes to turn BP around, and the scale of the challenges he faces.
Hayward took over when former chief executive Lord Browne resigned May 1 after it emerged he had lied in court about his relationship with a former lover.
BP has been suffering from well-publicized problems, including a squeeze on refining margins and falling U.S. natural gas prices, as well as operational hold-ups such as damage to a North Sea gas pipeline, the newspaper reported.
Hayward blamed BP's under-performance partly on excessive complexity, saying its fragmented structure must be simplified. He plans to consolidate it into larger operations. "There is massive duplication and lack of clarity of who does what," Hayward was quoted as saying. "We will reduce the number of organization units. [We] will reduce the number of layers from the workers up to the CEO from 11 to about seven."
Hayward also said BP needed to shift its culture and take well-judged risks, the Financial Times stated. "Assurance is killing us," he was quoted as saying. He said people should be in positions long enough to see the consequences of their decisions, and that he wanted a "leadership style that really listens."