Energy
0

Shell to Slash 10,000 Jobs

Shell to Slash 10,000 JobsShell to Slash 10,000 Jobs

Royal Dutch Shell confirmed it will cut 10,000 jobs worldwide after an 87% plunge in annual net profits on slumping oil prices.

The Anglo-Dutch group reported a profit of $1.94 billion for 2015, compared with almost $15 billion the previous year, it said in a statement. It is the company's lowest annual profit in at least 13 years, ABC Online reported.

Ben van Beurden, the company's chief executive, flagged the cuts last month as part of a takeover of its smaller rival, BG Group.

"As we have previously indicated, [the changes] will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies," he said in a statement on Thursday.

Shareholders of both Shell and BG have voted in favor of the merger, which van Beurden expects to be completed in a "matter of weeks". He said Shell would continue to manage costs amid falling prices for oil.

Oil prices have fallen steadily, from more than $100 a barrel 18 months ago to around $30 a barrel now. Nevertheless, Shell has maintained its dividend payout to shareholders, a move that relieved investors.

Shell's arch-rival, BP, announced a profit slump of 51% to $5.9 billion for 2015 and a further 3,000 job cuts earlier this week. The net loss for the year was $6.5 billion, the most in at least 30 years.

At the time of the proposed BG tie-up, oil was trading at about $55 a barrel, but it is currently trading at about $35 a barrel, leading some shareholders to oppose the plan.

Shell said it had cut operating costs over the year by $4 billion, or around 10%, and expected to cut costs by a further $3 billion this year.

The company also cut back hard on investment over the year, with capital spending slashed by $8.4 billion from a year ago to $28.9 billion.

Shell sold $5.5 billion worth of assets in the course of 2015 and is planning to sell another $30 billion of assets.

Financialtribune.com