Royal Dutch Shell announced Wednesday it will cut up to 9,000 jobs worldwide by the end of 2022 under its ongoing transformational plan, Kallanish Energy reports.
According to CEO Ben van Beurden, Shell must restructure to achieve its net-zero emissions ambition by 2050 or sooner. “It’s the right thing to do for the future of the company,” he added.
The changes include ensuring its Upstream business offers a strong flow of cash to the company so it has the financial strength to invest further in lower-carbon products; refocusing the Refining business into a smaller, “smarter” segment; and placing a bigger focus on the Integrated Gas business. Meanwhile, low-carbon products and technologies will become a new growth area for the company.
The “new and reshaped Shell” will have a strong focus on helping its customers to decarbonize, particularly in sectors such as aviation, shipping and heavy-duty road transport. Shell said 85% of its carbon footprint comes from customers’ emissions when using their products.
Van Beurden said there currently are “too many layers and levels” between the CEO, operators and technicians across Shell’s operations globally.
“We have to be a simpler, more streamlined, more competitive organization that is more nimble and able to respond to customers,” he said. “To be more nimble, we have to remove a certain amount of organizational complexity. In addition, we have to make sure we are making the best of the core capabilities we need to succeed.”
The “extremely tough” job-cutting process is expected to save the company some $2-2.5 billion annually, along with other cost reduction measures. These include lowering travelling and use of contractors, as well as exploring the “opportunity” of virtual working.
“We do not have an exact figure because the details are still being worked out, and we have never had a target to reduce a particular number of jobs. But we can say that, because of the efficiencies we expect to gain, we will reduce between 7,000 and 9,000 jobs by the end of 2022,” said the CEO.
The figures include around 1,500 people who have already agreed to take voluntary redundancy this year.
“A company like Shell has a choice. It can choose to produce oil and gas with the lowest possible emissions. Or it can say: “If society wants to get to net-zero emissions and we really want to be an integral part of that society, then we need to get to net zero as well,” said van Beurden, adding the company has taken the second one.
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