Shell sees 10,000 job cuts after BG takeover

Hague-based energy giant Shell said Wednesday it expects a reduction of 10,000 staff after completion of the proposed merger with LNG player BG.

Synergies from the BG combination “will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies, as streamlining and integration of the two companies continue,” Shell’s CEO Ben van Beurden said in a statement announcing the company’s fourth-quarter trading and operational update.

“The completion of the BG transaction, which we are expecting in a matter of weeks, will mark the start of a new chapter in Shell, to rejuvenate the company, and improve shareholder returns,” van Beurden said.

According to the CEO, operating costs have reduced by $4 billion, or around 10% in 2015, and the company expects Shell’s costs to fall again in 2016, by a further $3 billion.

“Shell is taking impactful steps to refocus and reduce capital spending. Shell’s capital investment in 2015 is expected to be $29 billion, an $8 billion or over 20% reduction from 2014 levels. This has been delivered by efficiency improvements and more selectivity on new investments,” van Beurden said.

Capital investment for Shell and BG combined in 2016 is currently expected to be $33 billion, around a 45% reduction from combined spending, which peaked in 2013, he added.

Shell’s full year 2015 earning are expected to be in the region of $10.4 – 10.7 billion.

LNG World News Staff