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BP chief executive Bob Dudley. Image courtesy of BP/Youtube.

BP said Tuesday it will layoff 7,000 employees as low oil prices weighed heavily on the company’s fourth quarter results.

The company expects to reduce the number of staff and contractor roles in its upstream segment by around 4,000 during 2016 as well as laying off  up to 3,000 staff and contractors from its downstream segment by the end of 2017.

“We are continuing to move rapidly to adapt and rebalance BP for the changing environment. We’re making good progress in managing and lowering our costs and capital spending, while maintaining safe and reliable operations and continuing disciplined investment into the future of our portfolio,” BP group chief executive Bob Dudley.

BP booked a fourth quarter replacement cost (RC) loss of $2.23 billion compared to a loss of $969 million a year ago.

The company took a $2.61 billion  post-tax net charge for non-operating items for the fourth quarter and an $11.27 billion post-tax net charge for non-operating items for the full year.

The net charge is primarily tied to impairment charges related to the company’s upstream segment and also reflects $450 million of restructuring charges for the group.

As part of the non-operating items, the company took a net pre-tax charge of $443 million for the fourth quarter and $11.95 billion for the full year related to the Deepwater Horizon spill.

Underlying RC profit for the fourth quarter was $196 million, down from $2.23 billion for the same period in 2014, while underlying RC profit for the full year was about $5.91 billion, down from $12.13 billion in 2014.

BP said it has taken $1.5 billion in cumulative restructuring charges from the beginning of the fourth quarter 2014 to the end of 2015.

The company expects to take a further $1 billion of restructuring charges in 2016.

BP’s upstream segment fell sequentially to a RC loss of $2.28 billion before taxes and interest in the fourth quarter while the company’s downstream segment posted a fourth quarter RC profit of $838 million, up from $780 million a year ago.

The company reported a $3.3 billion fourth quarter loss attributable to shareholders, compared to a $4.4 billion loss in the prior year quarter, and a full year loss attributable to shareholders of $6.48 billion, down from a $3.78 billion profit in 2014.

In the fourth quarter BP produced 3.397 million barrels of oil  equivalent per day, including its share of Rosneft’s production, up slightly from 3.214 million boe/d for the same period in 2014.

Full year production ticked up to 3.277 million boe/d from 3.151 million boe/d in 2014.

The company expects full year 2016 underlying production to be “broadly flat” compared with 2015 levels.