Energy major Shell unleashed Wednesday a major restructuring to combat plunging oil prices driven by the coronavirus pandemic, warning it will also spark more asset writedowns in the third quarter.

Royal Dutch Shell said in a statement that it would axe between 7,000 and 9,000 positions by the end of 2022, of which 1,500 staff have already agreed to take voluntary redundancy this year.

The job cuts would amount to roughly 10 percent of Shell’s total global workforce of 80,000 staff across more than 70 countries.

The Anglo-Dutch giant aims to generate annual savings of between $2.0 billion and $2.5 billion (1.7-2.1 billion euros) under the plan, which also includes other measures to streamline the business in response to the fallout from the Covid-19 crisis.

Those savings will partially contribute to the $3.0-$4.0 billion efficiency drive that was announced in March and runs to 2021, it added.

Royal Dutch Shell says it will axe between 7,000 and 9,000 positions by the end of 2022, of which 1,500 staff have already agreed to take voluntary redundancy this year Royal Dutch Shell says it will axe between 7,000 and 9,000 positions by the end of 2022, of which 1,500 staff have already agreed to take voluntary redundancy this year Photo: AFP / BEN STANSALL

 

Shell had already flagged in July that job cuts were in the pipeline after posting a colossal $18.1-billion second-quarter net loss as coronavirus savaged the world oil market.

It warned on Wednesday that it would suffer more post-tax impairment charges of between $1.0-$1.5 billion in third quarter earnings, which will be published at the end of October.

“This is an extremely tough process. It is very painful to know that you will end up saying goodbye to quite a few good people,” said Chief Executive Ben van Beurden in an interview on the company website.

“But we are doing this because we have to, because it is the right thing to do for the future of the company.

TOKYO (Reuters) – Japan should keep selling government bonds to the central bank to pay for the cost of reflating the economy out of a pandemic-induced slump, an academic close to new Prime Minister Yoshihide Suga said.

FILE PHOTO: A woman walks past at a shopping district, amid the coronavirus disease (COVID-19) pandemic in Tokyo, Japan August 17, 2020. REUTERS/Kim Kyung-Hoon

There are “no limits” to what monetary policy can do to achieve higher inflation, at least until the Bank of Japan achieves its elusive 2% inflation target, Kaetsu University Professor Yoichi Takahashi told Reuters in an interview.

A former finance ministry bureaucrat, Takahashi keeps close contact with Suga via mobile phone and email.

He met with the premier at a Tokyo hotel days after Suga was elected to succeed Shinzo Abe, who resigned due to poor health.

The two discussed “economy and other issues,” Takahashi said, declining to comment in detail.

“Suga was absolutely right to say he would continue Abenomics,” Takahashi said, referring to Abe’s reflationary recipe comprised of bold monetary easing, flexible fiscal spending and reform.

Takahashi hailed Suga’s intention to proceed with the third arrow of structural reform, which made little headway under Abenomics, and there’s room left for the first two arrows, monetary policy easing and fiscal spending.

Takahashi criticised financial institutions for complaining about dwindling profits caused by the central bank’s negative interest rate policy.

There are many things regional banks can do such as reviewing business models and streamlining operations before they are forced into realignment, he added.

“Who’s complaining about side effects of monetary easing? It’s wrong to make such an argument. The BOJ should keep buying government bonds as there’s no limit to monetary policy.”

The government for its part should not hesitate to boost fiscal spending at a time when