Royal Dutch Shell
unveiled plans on Wednesday to cut up to 9,000 jobs by the end of 2022, as part of a major restructuring plan as it shifts to low-carbon energy.
The oil giant said it expected to make annual savings of $2 billion to $2.5 billion through a “simpler, streamlined and lower-cost organization.”
In a trading update, the company said it expected to take another impairment charge of $1 billion to $1.5 billion in the third quarter, and that production was set to drop due to the hurricanes in the U.S. Gulf of Mexico. The stock edged lower into afternoon London trading.
The back story. The oil-and-gas industry has been one of the worst affected throughout the coronavirus crisis, as the pandemic caused demand to collapse. In April, Shell cut its dividend for the first time since World War II. The company reported a record $18.1 billion second-quarter loss, following a $16.8 billion write-down as it lowered long-term oil price forecasts. Its peers have faced similar problems, with
plunging to a $16.8 billion net loss in the second quarter, having also cut its dividend for the first time in a decade.
However, the Covid-19 crisis has also accelerated the industry’s shift toward green energy. BP has ramped up its strategy—to become net zero on carbon by 2050—by pledging a tenfold increase in low-carbon investment to $5 billion a year by 2030. Shell also launched a review of its business, with a view to transitioning toward low-carbon energy.
What’s new. Chief Executive Ben van Beurden said cutting jobs was “the right thing to do for the future of the company,” as he laid out