Shell Plans to Cut 2,200 Jobs -- WSJ
26 May 2016 - 5:03PM
Dow Jones News
Company vowed to lower its spending further after sharp drop in
earnings
By Sarah Kent
LONDON -- Royal Dutch Shell PLC plans at least another 2,200 job
cuts this year, part of the oil group's effort to adjust to low
crude prices while integrating the recently acquired BG Group.
The Anglo-Dutch oil giant had made it clear it would slash
thousands of jobs after its roughly $50 billion takeover of BG, but
the latest reductions announced on Wednesday would bring the total
number cut this year to "at least" 5,000 globally. The reductions
would offset the addition of BG's 4,600 staff and bring the total
number of job cuts at Shell since 2015 to 12,500.
Shell is just one of many oil companies trying to reduce costs
fast to combat a dramatic slump in oil prices over the past two
years, even though oil prices have rebounded off lows at the start
of the year of below $30 a barrel.
Across the industry, companies have slashed billions from their
spending plans and fired thousands of employees to manage the sharp
market downturn amid a global glut of crude.
"These are tough times for our industry and we have to take
further difficult decisions to ensure Shell remains competitive
through the current, prolonged downturn," said Paul Goodfellow,
Shell Vice President for the U.K. and Ireland in an emailed
statement.
Shell reported an 83% drop in first-quarter earnings from the
same period last year, vowing at the time to bring down spending
further.
Just months into its acquisition of BG, management faces the
challenge of delivering on promised merger-related savings. Shell
is counting on the acquisition of BG to give it a dominant foothold
in lucrative liquefied natural gas markets and deep water oil
fields offshore Brazil. Some shareholders criticized the deal as
too expensive.
"We need to reduce our cost base, improve production efficiency
and have an organization that best fits our combined portfolio and
business plans, " Mr. Goodfellow said.
In the U.K. and Ireland, the company plans to reduce staff
working in exploration and production by 475.
Write to Sarah Kent at sarah.kent@wsj.com
(END) Dow Jones Newswires
May 26, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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