Shell to axe 9,000 jobs: Oil giant struggles with slump in demand for fuel and shift to green energy
Shell is axing up to 9,000 jobs as it grapples with a slump in demand for fuel and a shift to green energy.
The FTSE 100 oil major, which employs 83,000 globally including 6,000 in the UK, did not indicate where the redundancies would occur.
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But chief executive Ben van Beurden said the job cuts were ‘the right thing to do for the future of the company’ after it vowed to slash its carbon emissions to net zero by 2050.
Redundancies: Shell chief executive Ben van Beurden said the job cuts were ‘the right thing to do for the future of the company’
The Covid-19 outbreak reduced demand for oil, as manufacturing plants shut down, planes were grounded, travel stalled and drivers stayed at home.
Shell lost six of its own workers, and six contractors, to the virus.
But it has also launched a sweeping review into how it will survive in a world moving away from fossil fuels.
Already Shell has had to cut its dividend for the first time since the Second World War.
It has concluded it will need to cut up to 10 per cent of its workforce as it aims to save between £1.5billion and £3billion per year.
Van Beurden said: ‘This is an extremely tough process.
‘But we are doing this because we have to, because it is the right thing to do for the future of the company.’
The cuts should be completed by the end of 2022.
Shell added that its earnings for the third quarter of the year were likely to be at the lower end of the £620million to £678million range it had predicted.
All oil firms are confronting the challenge of how to remain relevant in a world where investors, customers and businesses are becoming reluctant to associate with fossil fuels.
Van Beurden said: ‘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.’