Shell to cut up to 9,000 jobs on back of Covid-19 crisis

Royal Dutch Shell plans to cut up to 9,000 jobs in the wake of the coronavirus pandemic, up to 10% of its workforce, as part of a major corporate overhaul to keep pace with the global transition to clean energy.

The Anglo-Dutch oil company, which employed 83,000 workers at the end of last year, expects to save up to $2.5bn a year through a restructuring plan that includes shedding between 7,000 and 9,000 employees before the end of 2022.

The global staff cuts come after Europe’s largest oil company cut its dividend for the first time since the end of the second world war and revealed a net loss of $18.3bn (£14.1bn) for the second quarter of 2020 when global oil prices tumbled to record lows in response to the coronavirus outbreak.

“Make no mistake: this is an extremely tough process,” said Ben van Beurden, Shell’s chief executive. “It is very painful to know that you will end up saying goodbye to quite a few good people. But we are doing this because we have to, because it is the right thing to do for the future of the company.”

Shell said about 1,500 employees had already taken voluntary redundancy but did not give a clear timescale for the remaining job cuts.

The company is scheduled to report its financial results for the third quarter next month and warned investors that its production of oil and gas will fall sharply lower and revenue from its gas business and commodity trading desks would be weaker, too.

The coronavirus has battered the oil industry as many major oil companies begin taking steps towards low-carbon energy to help play a role in reducing global carbon emissions in line with international climate targets.

The BP boss Bernard Looney has also announced plans to cut jobs and will lose about 10,000 employees from its global workforce of 70,000 as the company expands its renewables business and reduces oil and gas production.

Van Beurden said Shell has to be “a simpler, more streamlined, more competitive organisation” that is “more nimble and able to respond to customers”.

He said: “We do not have an exact figure because the details are still being worked out and we have never had a target to reduce a particular number of jobs. But we can say that, because of the efficiencies we expect to gain, we will reduce between 7,000 and 9,000 jobs by the end of 2022.”