Business

Shell is cutting up to 9,000 jobs as oil demand drops

Shell is cutting down up to 9,000 jobs as oil demand drops

Royal Dutch Shell is set to cut 7,000 to 9,000 jobs amidst the slump in oil demand due the Covid-19 pandemic.

The cuts would be implemented by 2022 and included 1,500 people who were taking voluntary redundancy the oil giant has said.

Shell had 5 months ago cut its dividends for the first time since World War 2.

Shell chief executive Ben van Beurden said the job cuts were “the right thing to do for the future of the company” as it strives to become a net-zero emissions energy business.

The organization employs 83,000 people worldwide and has been hit by a significant drop in profits since the pandemic struck.

It saw a 46% fall in first-quarter net income to $2.9bn (£2.3bn), while second-quarter income fell 82% to $638m.

The firm said third-quarter earnings were expected to be “at the lower end of the $800m to $875m range”.

Shell is in the midst of a cost-cutting drive that is expected to deliver annual savings of $2bn to $2.5bn by 2022. Other big oil firms are facing similar challenges. 

As stated by Van Beurden. “We have had to act quickly and decisively and make some very tough financial decisions to ensure we remained resilient, including cutting the dividend,” said “But as hard as they were, they were entirely the appropriate choices to make. And Covid-19 has hit us in another way. We have, very sadly, lost six employees and six contractor colleagues to the virus.”

He said Shell had to be “a simpler, more streamlined, more competitive organization that is more nimble and able to respond to customers”.

Mr van Beurden reiterated that Shell intended to become a net-zero emissions energy business by 2050 or sooner.

That meant the company had to change the type of products it sold, he said.

“We will have some oil and gas in the mix of energy we sell by 2050, but it will be predominantly low-carbon electricity, low-carbon biofuels, it will be hydrogen and it will be all sorts of other solutions too,” he said.

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