SHELL will cut 7,000 – 9,000 jobs as the company is reorganised to transition to a lower-carbon business.
The restructure of the company is part of Shell’s plan to be net zero by 2050, however this has been accelerated due to the economic impact of the Covid-19 pandemic.
Ben van Beurden, CEO of Shell, said: “We have to be net zero in all our operations, which means major changes at refineries, chemicals sites, on-shore and offshore production facilities. 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.”
“Refining is another business that we will refocus. It will be smaller but smarter. We will keep only what is strategically essential to us and integrate those refineries with our chemicals business, which we plan to grow. We will keep sites in key locations which have the flexibility to adapt. It is also worth noting that, if we want to be a large player in biofuels, a lot of the biofuel capability will be built within our refining infrastructure. We will end up with fewer than ten refineries, compared to 55 around 15 years ago, but they will be set up to serve the changing needs of society.”
Shell employed 83,000 people globally at the end of 2019, but will cut 7,000–9,000 jobs by 2022. This includes 1,500 voluntary redundancies. The job cuts, along with other measures, should result in an annual cost saving of US$2–2.5bn.
Van Beurden said: “We have looked closely at how we are organised and we feel that, in many places, we have too many layers in the company: too many levels between me, as the CEO, and the operators and technicians at our locations. We have also found that there are many people in the middle of our organisation who have a relatively small number of people reporting to them. In some cases there are good reasons for that, but as a principle we are looking to remove that complexity, and cost, so we can be the nimble, efficient and customer-focussed company we need to be.”
He said that the exact figure on expected job losses is not available yet and that there isn’t a target to reduce a particular number of jobs.
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