Shell is to cut hundreds of jobs from its oil and gas exploration operation in the latest move by the chief executive, Wael Sawan, to slash up to $3bn in costs by the end of next year. The oil and gas company is to cut about a fifth of its workforce in two subdivisions of its oil and gas business responsible for the energy company’s exploration strategy and developing its oil and gas finds. The cuts, which are understood to be subject to consultation with employees, will affect jobs in offices around the world. However, offices in Houston and The Hague are expected to be affected most, with a lesser effect on its UK operations.
“Shell aims to create more value with less emissions by focusing on performance, discipline and simplification across the business,” a spokesperson for the company said. “That includes delivering structural operating cost reductions of $2bn-$3bn by the end of 2025, as announced at our Capital Markets Day event in June 2023. Achieving those reductions will require portfolio high grading, new efficiencies and a leaner overall organisation.”
The operations subject to the cuts are part of Shell’s oil and gas production division, known as upstream, which accounted for more than a third of the company’s $28bn in adjusted profits last year. Since Sawan replaced Ben van Beurden as chief executive in September 2022, he has abandoned plans to cut oil production and instituted a cost-cutting programme to increase the oil and gas conglomerate’s profits. The company, which reported $40bn of operating expenses last year, has cut jobs in areas including its chemicals and wind business and centralised functions such as legal and communications teams.
In October, Shell cut hundreds of jobs from its low-carbon solutions division. Earlier this month, Sawan said he had so far made $1.7bn of cost savings across the business and would continue to “simplify the way the organisation works”.
The Guardian
