Royal Dutch Shell PLC (LON: RDSA) to cut 330 jobs

  • January 13, 2021 01:27 PM GMT
  • Kunal Sawhney
    CEO Kunal Sawhney
    2212 Posts

    Kunal Sawhney is founder & CEO at Kalkine and is a richly experienced and accomplished financial professional with a wealth of knowledge in the Australian Equities Market. Kunal obtained a Master of Business Administration degree from University of T...

Royal Dutch Shell PLC (LON: RDSA) to cut 330 jobs

Summary

  • The Anglo-Dutch oil giant said that it is planning to shed a quarter of its workforce for its North Sea business by December 2022
  • The slashing of jobs in bulk will affect the office-based roles in Aberdeen

Royal Dutch Shell PLC (LON: RDSA) announced that it was preparing to cut 330 UK jobs over the next two years as the coronavirus pandemic continued to affect its profits.

The Anglo-Dutch oil giant said that it was planning to shed a quarter of its workforce for its North Sea business by December 2022. The total employee strength will be reduced to around 1,000 by this job cut. Shell employs a total of 83,000 employees worldwide.

The slashing of jobs in bulk will affect office-based roles in Aberdeen, from where the firm’s UK North Sea oil and gas business is operated.

(Image source: ©Kalkine Group 2021)

 

The move forms a part of the group’s wider plans that were announced in August 2020 to cut 9,000 jobs worldwide over the next two years, which would save $2.5 billion (£1.9 billion) annually. Among the 9,000 staff, around 1,500 have voluntarily accepted the severance deal.

By undertaking this program, the company will be able to save money. It will also form a part of the group’s efforts in reshaping itself for transition to a lower carbon energy system.

The decision follows a substantial drop in demand for oil amid global lockdowns and collapse in profits since February.

 

Trading update

In its recent trading update, Shell disclosed that there was a 46 per cent decline in its net income for Q1 to £2.3 billion. The oil major also recorded a 82 per cent fall in its Q2 income as the industry continued to be adversely affected by lockdown.

Ben van Beurden, the chief executive of Royal Dutch Shell said that the company was required to act quickly and decisively and make some very tough financial decisions to ensure it remained resilient, which also included cutting the dividend.

 

Future plans

Despite paying off staff, the group indicated that it remained committed to the North Sea business. Shell had confirmed in October last year that its growth strategy required it to focus on the UK North Sea, as it is one of the core regions where it wanted to remain in the upstream oil and gas production business for years.

The oil and gas company has said that it planned to increase investment in areas such as wind and hydrogen power along with carbon, capture and storage. The profits that the group generates from the production of oil and gas will enable it to invest in low carbon energy sources, said Shell.

Van Beurden informed that the oil and gas firm aimed to become a net-zero emission company by 2050.

The coronavirus induced pandemic and the crash in demand for oil along with the energy transition have prompted major oil companies to slash their workforce and review their operations.

For instance, another major oil and gas company of the United Kingdom and the rival of Shell, BP PLC (LON: BP) also announced its plans to cut 10,000 jobs all over the world recently.

Interesting Read: Shell (LON: RDSA), BP (LON: BP.) Banking on Retail Network for Boosting Profit

 


Disclaimer
The website https://kalkinemedia.com/uk is a service of Kalkine Media Ltd (Kalkine Media), Company Number 12643132. The principal purpose of the content on this website is to provide factual information only and does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform. In providing you with the content on this website, we have not considered your objectives, financial situation or needs. You should make your own enquiries and obtain your own independent advice prior to making any financial decisions.
Some of the images that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed on this website unless stated otherwise. The images that may be used on this website are taken from various sources on the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image. The information provided on the website is in good faith, however Kalkine Media does not make any representation or warranty regarding the content, accuracy, or use of the content on the website.

 

   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK