The job cuts comprised part of its USD 4 billion reduction in operating costs. Shell, which currently employs about 94,000 people, said it is also scaling back its oil exploration operations. The firm announced profits of USD 3.4 billion in the three months to 30 June, a 35% decrease compared with last year.
Ben van Beurden, Chief Executive, Shell commented, "We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery. We're taking a prudent approach, pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends for shareholders."
It said the job cuts affected contractors as well as Shell employees, and included job losses at its operations in the North Sea and cuts resulting from divestments in Nigeria.
Shell said that it was "planning for a prolonged downturn" in oil prices. The price of oil is currently about USD 53 a barrel, sharply down from about USD 110 a barrel a year ago. It also announced that it was selling a 33% stake in its Japanese business, Showa, to petrochemical group Idemitsu for about USD 1.4 billion.
Shell said it had seen USD 20 billion of asset sales in 2014 and 2015, and it expected to see USD 30 billion in sales between 2016 and 2018. In April, Shell announced that it was buying gas giant BG—the UK's third-largest energy company—for GBP 47 billion. In its latest announcement of job losses, Shell said its deal with BG "should enhance our free cash flow" and be "a springboard to change Shell into a simpler and more profitable company".
It added that it planned to reduce costs further in 2016, though the company was unspecific about what those cuts would entail.
Paul Arkwright
Publisher
