Shell will cut 7,000 to 9,000 jobs in the coming period to save costs due to the difficult market conditions in the oil sector due to the corona crisis. “We have too many layers in the company,” says Ben van Beurden, CEO.
The number of jobs that Shell is cutting also includes approximately 1,500 employees who are leaving the company voluntarily this year. The job losses will occur in the period up to the end of 2022 and should lead to cost savings of 2 billion to 2.5 billion dollars per year.
The oil and gas group announced this in an interim trade update, in anticipation of the quarterly figures.
Shell now employs approximately 82,000 people worldwide. The company stated yesterday that it was engaged in a ‘strategic reorientation’.
Transition
“You’ve seen this news coming for a long time. Employees have been concerned for months. Shell has to make the switch to sustainable energy,” concludes RTL Z stock exchange commentator Durk Veenstra.
“This is an extremely difficult process,” said Shell CEO Ben van Beurden on his own site. “It is very painful to have to say goodbye to good people. But we do this because we have to do it, because it is the right choice for the future of the company. Lowering costs is essential. We have to be competitive. ”
He strives for a ‘more streamlined organization’. “We took a good look at how we are organized and we feel that we have too many layers in the company in many places. There are too many levels between me, as CEO, and the operators and technicians at our sites.”
The CEO does not say in which countries the layoffs take place or in which layers of the company. According to a spokesperson for the company, this is also not yet known.
Energy transition
If it were up to the CEO, the company will play an important role in the energy transition. The goal is to have reduced emissions to zero by 2050.
“That will lead to major changes at refineries, chemical sites, onshore and offshore production facilities. But it also means that we have to change the types of products we sell. We will have some oil and gas in the mix of energy we sell by 2050, but it will mainly be low-carbon electricity and low-carbon biofuels and hydrogen. ”
Unions response
Trade unions FNV and CNV want Shell to quickly clarify what the announced global reorganization means for Dutch personnel.
“Shell’s announcement is about global job losses, but they don’t specify that by country or location,” said FNV director Egbert Schellenberg. “The reorganization will last until the end of 2022, which means that it will take a long time and that employees will have to sit in uncertainty for a long time.”
The FNV director speculates that the 10 percent of the total number of job cuts may be passed on to the Dutch personnel, and that approximately 900 positions would be lost in our country. “But they don’t provide any insight, and they roll out the plan bit by bit without disclosing information,” said Schellenberg.