Oil giant Shell is cutting “at least 2,200” more jobs as part of cost cutting measures, designed to cope with the persistently depressed price of oil.
The cuts will include the loss of 475 jobs in the company’s operations in the UK and Ireland.
“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,” Paul Goodfellow, Shell’s vice president for UK & Ireland, said in statement.
That “prolonged downturn” saw Shell’s profits slump by 80% to just $US3.8 billion in its full year results in February.
Goodfellow continued: “The reductions we’re announcing today in Aberdeen are part of a global programme of job reductions in Shell. Last year, in response to the oil price downturn, we made the tough but necessary decision to remove 7,500 Shell staff and direct contractor roles and this has now been completed. Separately, as previously announced, a further 2,800 global staff reductions were initially identified as part of the BG integration, which is now well underway.”
In its statement, Shell added:
For absolute clarity, the additional job reduction figure announced today is at least 2,200. This would bring the total number of staff and direct contractor roles leaving Shell from the start of 2015 to the end of 2016 to at least 12,500, up from 10,300.
However, the net number of job losses at Shell in 2016 will be fewer than 5,000 because we expect to continue recruiting during the year in various areas of the business including downstream, in shared services centres, as a result of IT ‘in-shoring’ initiatives and at graduate level.
In January, the company said it would cut 10,000 jobs in its merger with BG Group, and sell $US30 billion worth of assets, to protect its profitability in an era of cheap oil.
That announcement came during a period when oil was trading below $US30 per barrel, and while the price of crude has now recovered to trade at just under $US50 per barrel, oil companies are still facing tough choices about staffing given that crude does not look like rallying back to the highs of $US100 per barrel, which were last seen in June 2014.
Investors in the company are thus far unmoved by the news, with Shell’s A shares currently up by around 0.7% on the day. Shell’s stock is up by 33% since the last announcement of job cuts in January. Here’s how that looks: