Shell to slash more jobs

LNG giant Royal Dutch Shell said it will increase the number of job cuts by at least 2,200 to ensure the company is competitive in a ‘lower for longer’ oil price environment.

This would bring the total number of staff and direct contractor roles leaving Shell from the start of 2015 to the end of 2016 to at least 12,500, Shell said in a statement on Wednesday.

Shell has earlier flagged around 10,300 job cuts worldwide as the Hague-based company is slashing costs in a low oil price environment and following the takeover of LNG player BG.

However, according to Shell, the net number of job losses at Shell in 2016 will be fewer than 5,000 because the company expects to continue recruiting during the year in various areas of the business including downstream, in shared services centres, as a result of IT ‘in-shoring’ initiatives and at graduate level.

At the end of 2015, Shell employed around 90,000 people globally and BG employed around 4,600, the company said.

‘Lower for longer’ environment

Shell said that the company’s staff have on Wednesday been informed about the progress being made on integrating BG into the company, and on further measures that are necessary to ensure that Shell is “competitive in a low oil price environment”.

Paul Goodfellow, Shell’s Vice President for UK & Ireland, addressed staff in Aberdeen this morning. Speaking after that engagement, Goodfellow said:

“We’re continuing the improvement journey we’ve been on to create a competitive and sustainable business in the North Sea. Despite the improvements that we have made to our business, current market conditions remain challenging.

“Our integration with BG provides an opportunity to accelerate our performance in this ‘lower for longer’ environment. We need to reduce our cost base, improve production efficiency and have an organisation that best fits our combined portfolio and business plans.

“As a result, we will reduce the size of the organisation supporting our UK and Ireland Upstream business by around 475 people. We will look to implement the majority of this change during 2016.

“Following these changes, Shell will still remain a key employer in the North East of Scotland with around 1,700 employees.

“The reductions we’re announcing today in Aberdeen are part of a global programme of job reductions in Shell. Last year, in response to the oil price downturn, we made the tough but necessary decision to remove 7,500 Shell staff and direct contractor roles and this has now been completed. Separately, as previously announced, a further 2,800 global staff reductions were initially identified as part of the BG integration, which is now well underway.

“These are tough times for our industry and we have to take further difficult decisions to ensure Shell remains competitive through the current, prolonged downturn. In 2016, the number of job reductions in response to low prices and as a result of the BG integration is expected to total at least 5,000 globally. This number includes the 2,800 integration-related roles previously announced.”

LNG World News Staff