By Tony Winterburn • 30 September 2020 • 10:14
OIL giant Shell has announced it will cut 9,000 jobs worldwide in response to the Covid pandemic.
Royal Dutch Shell has said it plans to cut up to 9,000 jobs worldwide following a collapse in demand for oil following the worldwide coronavirus crisis. The oil giant has said the cuts will be fully implemented by the end of 2022. The company also told investors that this includes around 1,500 employees who have agreed to take voluntary redundancy this year.
Ben van Beurden, chief executive of Royal Dutch Shell, said: “We have to be a simpler, more streamlined, more competitive organisation that is more nimble and able to respond to customers. To be more nimble, we have to remove a certain amount of organisational complexity.” He said the company is looking at a raft of other areas where it can cut costs, such as travel, its use of contractors and virtual working. Mr Van Beurden said the pandemic has shown the company it can adapt to working in new ways but stressed that “a large part of the cost-saving for Shell will come from having fewer people.”
Earlier this year in June, Shell’s rival BP announced it was cutting around 10,000 jobs from its workforce to cope with the impact of the virus. Shell said it expects that cost-cutting measures will secure annual cost savings of between $2 billion and $2.5 billion (£1.5 billion-£1.9 billion) by 2022. This will also partially contribute to a previously announced reduction in the company’s operating costs by $3 billion to $4 billion (£2.3 billion-£3.1 billion) by the first quarter of 2021.
Shell also told investors on Wednesday that it expects third-quarter production to be between 2.15 million and 2.25 million barrels of oil equivalent a day. Production levels have been badly impacted by between 60,000 and 70,000 barrels a day due to hurricanes that devastated the Gulf of Mexico.
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