By Adriano Marchese

BP PLC plans to cut nearly 10,000 jobs, or 14% of its workforce, and freeze pay increases for senior level managers as it seeks to strengthen its finances, the company said Monday.

The job cut announcement comes as new Chief Executive Bernard Looney responds to the coronavirus pandemic's devastating effect on oil demand, and coincides with his attempts to reshape the British oil giant for a low-carbon future.

Mr. Looney, who took the helm in February, had been crafting a yet-to-be revealed reorganization plan that has now been "accelerated and amplified" by the need to respond to market conditions and reduce costs, BP said.

"It was always part of the plan to make BP a leaner, faster-moving and lower carbon company," Mr. Looney wrote in an email to employees. "Then the Covid-19 pandemic took hold...The oil price has plunged well below the level we need to turn a profit. We are spending much, much more than we make -- I am talking millions of dollars, every day."

BP, with a current workforce of around 70,000 people, said the moves will help to drive down its operating costs by $2.5 billion in 2021, and that it will likely have to go even further.

The cuts will introduce a flatter organizational structure, Mr. Looney said. and will mostly come from office-based roles. The majority of employees affected are expected to leave by the end of 2020.

The revised structure is expected to significantly affect senior-level management. BP said it expects the number of group leaders -- the top 400 roles in the company -- to be reduced by a third.

The oil major said it is aiming to bring down its capital expenditure by 25% by the end of 2020, a reduction of around $3 billion.

The company said it would restart pay raises beginning Oct. 1, but only for midlevel employees. Senior level and group leaders won't be eligible for pay rises through to March 31, 2021, it said.

The company also warned that cash bonuses are "very unlikely" this year, as the company's remuneration committee considers the effects of the economic environment and the company's financial condition.