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Share Name Share Symbol Market Type Share ISIN Share Description
Royal Dutch Shell Plc LSE:RDSA London Ordinary Share GB00B03MLX29 'A' ORD EUR0.07
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -13.00 -1.39% 924.30 924.20 924.60 934.00 921.60 934.00 847,619 10:31:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 260,049.0 19,217.3 148.5 6.2 37,908

Shell to Cut Up to 9,000 Jobs--Update

30/09/2020 12:58pm

Dow Jones News


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By Sarah McFarlane 

Royal Dutch Shell PLC said it would cut up to 9,000 jobs in a broad restructuring, as the energy giant grapples with the continuing fallout of the coronavirus pandemic.

News of the cuts came Wednesday as the company warned it would report another set of poor earnings for the third quarter. Shell flagged a weaker performance in its trading activities -- previously a bright spot in an otherwise tough second quarter -- and said its oil-and-gas production business would report a second consecutive quarterly loss.

The update from Shell gives a first glimpse at how the world's biggest oil companies have continued to struggle in the most recent quarter. The pandemic has sapped demand for oil, sending prices tumbling and hitting profits hard. That has already prompted Shell to write down the value of some of its assets and cut its dividend for the first time since World War II.

Shell said it was restructuring to focus more on the highest value oil it produces, grow in liquefied-natural gas and invest in low carbon energy businesses, while shrinking its refining operations. It expects the plan to deliver annual cost savings of $2 billion to $2.5 billion by the end of 2022, including from the staff cuts, less travel and fewer contractors.

It expects to cut between 7,000 and 9,000 jobs from its more than 80,000 employees.

The planned job cuts follow similar moves at peers including BP PLC and Chevron Corp. to rein in costs amid the pandemic.

Shell said its restructuring isn't just a response to the pandemic, but also part of a broader plan to accelerate investments in low-carbon energy.

The company says that by 2050 it will sell predominantly low-carbon electricity, biofuels, hydrogen and other solutions. However, it says it needs its oil-and-gas business to perform well to fund that change.

Chief Executive Ben Van Beurden said Shell's core business would be critical to the effort. "We need it to be very successful, so we have the financial strength to invest further in our lower-carbon products," he added.

Shell is expected to update its strategy early next year, including giving details on its future spending on low-carbon energy.

BP earlier this year announced the most aggressive plan so far by an oil major to shift away from oil and gas -- cutting its production by 40% in the next decade -- while expanding in areas including wind and solar energy.

Detailing its performance in the third quarter, Shell said its LNG business would report lower margins, as long-term contracts started to reflect lower oil prices. It also said refining activity fell, although noted an improvement at its oil product marketing business compared with the previous quarter.

Analysts said the update was in line with expectations and that they hoped Shell would give more clarity about its restructuring plans when it reports its third-quarter results on Oct. 29.

Write to Sarah McFarlane at sarah.mcfarlane@wsj.com

 

(END) Dow Jones Newswires

September 30, 2020 07:43 ET (11:43 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

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