What Shell’s slimming cure will look like

What Shell's slimming cure will look like

Shell ready to cut up to 9,000 jobs to make the company more financially resilient

Strong Slimming Care for Shell. The oil & gas giant intends to streamline the workforce, cutting up to 9,000 employees and trying to cut costs. The pandemic accelerates a restructuring of the group necessary for a structural energy transition.

Let's go step by step.

THE ANNOUNCEMENT OF THE CEO OF SHELL

Ben van Beurden, Shell's chief executive since 2014, said the company will cut 7,000 to 9,000 jobs by the end of 2022. Employees, who were 83,000 at the end of last year, could rise to 74,000.

OBJECTIVE: REDUCE COSTS …

With a simpler organization, the company hopes to reduce annual costs by up to $ 2.5 billion annually, again by 2022. "Much of the cost savings for Shell will come from fewer people," Van said. Beurden in a note.

… AND MAKE SHELL MORE REASILENT

“We have looked closely at how we are organized and we believe that, in many places, we have too many levels in the company: too many levels between me, as CEO, and the operators and technicians in our offices,” added Van Beurden, emphasizing the need to make the group, in the post-pandemic, more resilient from a financial point of view.

THE DIFFICULTIES OF SHELL

The pandemic, in fact, made itself felt at Shell: oil and gas production would have dropped in the third quarter to just over 3 million barrels of oil equivalent per day. Covid, writes the Financial Times , along with seasonal hurricanes, has forced offshore platforms to close.

THE NUMBERS OF SHELL

The company expects “significantly lower” commercial profits for the third quarter. After announcing devaluations of $ 16.8 billion due to the collapse in oil prices, the oil company is poised for a new devaluation of between $ 1 and 1.5 billion.

THE ENERGY TRANSITION

Not just Covid. The company is committed to a plan to become a net zero emissions company by 2050: Shell has fewer than 10 refineries, up from 55 about 15 years ago. The hydrocarbon business will be increasingly "concentrated," Van Beurden said. “We will continue to invest” in oil & gas but the revenues will “add to the bottom line”.


This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/cura-dimagrante-di-shell/ on Wed, 30 Sep 2020 06:04:42 +0000.