Brent crude has collapsed by more than 57 per cent since the summer, from in $110 to under $50. The company's chief executive Bob Dudley sent a memo to employees notifying them of the pay freeze.
However, performance related bonuses have not been included. In 2013, BP paid its workforce £9bn. Two weeks ago BP announced it would shedding 300 positions at its North Sea operation. The company employs close to 4,000 people in the North Sea and another 11,000 across the UK.
Dudley wrote to staff:
The tougher external environment in 2015 means that our businesses and functions need to work... to take a number of measures in response to the harsh trading environment.
One of the measures we are taking across the group is a general freeze to base pay for 2015, with only a few exceptions for specific circumstances around the world.
In December, BP said it would be save $1bn over the next five quarters thanks to a restructuring. According to Bloomberg news, over 30,000 jobs have been lost in the oil industry.
Veterans of the oil industry such as Sir Ian Wood have urged the government to cut taxes to prevent job losses. Wood warned the government up to 40,000 jobs could be lost if things remain as they are.