Royal Dutch Shell has said it plans to cut about 7,000 to 9,000 jobs worldwide following the collapse in global oil demand due to the Coronavirus (Covid-19) pandemic.
The oil giant says the cuts will be implemented by 2022 and will add another 1,500 people who will be taking voluntary redundancy. “We have had to act quickly and decisively and make some very tough financial decisions to ensure we remained resilient, including cutting the dividend,” said chief executive Ben van Beurden.
The move comes five months after it cut its dividend for the first time since World War II. Shell, which employs 83,000 people worldwide, has been hit by a substantial drop in profits since the pandemic struck.
“But as hard as they were, they were entirely the appropriate choices to make. And Covid-19 has hit us in another way. We have, very sadly, lost six employees and six contractor colleagues to the virus.”
The firm saw a 46pc fall in the first-quarter net income to $2.9bn (£2.3bn), while the second-quarter income fell even far by 82pc to $638m.
The firm said third-quarter earnings were expected to be “at the lower end of the $800m to $875m range”.
Shell is in the middle of a cost-cutting drive that is expected to deliver annual savings of $2bn to $2.5bn by 2022.
Other big oil firms are also facing similar challenges. Rival BP has also cut its dividend and recently announced it was cutting 10,000 jobs out of its global workforce of 70,000.
Mr van Beurden reiterated that Shell intended to become a net-zero emissions energy business by 2050 or sooner meaning the company has to change the type of products it sells.
“We will have some oil and gas in the mix of energy we sell by 2050, but it will be predominantly low-carbon electricity, low-carbon biofuels, it will be hydrogen and it will be all sorts of other solutions too,” he said.
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