Shell cuts 6,500 jobs as it grapples with halved oil price
Published 31/07/2015 | 02:30
Royal Dutch Shell is to axe 6,500 jobs this year and step up spending cuts as it seeks to reassure investors it can withstand an extended period of lower oil prices, even through its planned $70bn (€64bn) acquisition of BG Group. The Anglo-Dutch company also announced plans to raise $50bn from asset sales between 2014 and 2018 after its second-quarter profit dropped by 37pc.
"Perhaps we left the impression that we will wait for the cavalry to arrive in the form of higher oil prices and that we were going to be lazy in terms of cost takeout," chief executive officer Ben van Beurden said yesterday.
"But what we also said at the time (of the BG deal announcement), perhaps not skilfully enough and not loud enough, is judge us on what we do and that is what today's message is all about," Mr van Beurden added. Shell said it anticipated 6,500 staff and direct contractor reductions globally in 2015 from a total of nearly 100,000 employees, as it grapples with a halving in oil prices to around $55 per barrel in a year.
Like rivals BP, Statoil and Total, it announced reductions in capital investments for a second time this year, shaving another $3bn off its 2015 budget to bring it to $30bn.
Around 20pc to 30pc of the $30bn of asset sales expected between 2016 and 2018 will come from the downstream and midstream businesses, Shell said.
This would leave the expanded Shell-BG group to focus on fewer but larger and more competitive assets.
Shell will only make two major investment decisions this year, with many projects scaled back, delayed or cancelled, Mr van Beurden said.