BP has bowed to the pressure of falling oil prices, announcing on January 12 that a further 4,000 jobs will be cut over a two-year period. The decision comes in response to a 72 percent plunge in oil prices since the summer of 2014, and a new sub-$30 per barrel price – the lowest since December 2003 – has done little to reassure oil majors about the likelihood of a rebound anytime soon.

The situation for oil markets is considerably worse than expected, and where oil companies originally held on for a brief downturn, the signs today are that this new low oil price environment is here to stay.

A planned $4bn investment in North Sea oil and gas will go ahead as planned, although BP will no doubt be keeping a close eye on the situation as it unfolds

The BP cuts will be made across the firm’s exploration and production business, of which 600 will be from North Sea operations. The company, and the industry at large, has already been forced to shelve spending plans, and job losses are a logical next step as the industry scrambles to make savings wherever it can. More than $200bn in planned projects have been either cancelled or postponed, and, as oil companies prepare to post a disappointing set of results for the year, it seems more cuts are on the horizon.

“This is all about us needing to be more competitive and to recognise the increasingly challenging business environment”, a BP spokesperson told the FT. “We have said for some time we expect oil prices to remain lower and to remain lower for longer – and this is certainly coming true.”

For North Sea oil, where one in five workers are set to lose their jobs, the news marks yet another setback, although there are no plans yet to close any rigs. A planned $4bn investment in North Sea oil and gas will go ahead as planned, although BP will no doubt be keeping a close eye on the situation as it unfolds.

For more on the North Sea oil nightmare, see European CEO’s special report on the situation.