Shell slashes staff as profit disappoints
OIL GIANT Royal Dutch Shell said yesterday it was cutting 5,000 jobs in a massive cost-cutting drive, as it reported disappointing profits and a gloomy outlook for 2010.
Pre-tax profits slumped 73 per cent to $4.6bn (£2.8bn) for the third quarter. Shell said staff in its upstream arm would have to reapply for 15,000 new positions in its “Transition 2009” restructuring programme.
Shell employs 50,000 people worldwide, and a fifth of its senior managers will leave as part of the restructuring. Half of the job cuts will be the UK, US and the Netherlands.
The Anglo-Dutch group has been struggling as oil, gas and liquefied natural gas (LNG) prices tumble worldwide. “We are not expecting a quick recovery,” said chief executive Peter Voser. Shell’s poor performance was exaggerated by rival BP smashing expectations in its third quarter profits earlier this week.
Both groups have been struggling to deal with fluctuating oil prices throughout the recession – crude prices peaked at $147 a barrel in July 2008, before slumping to less than $40 in January. It is now averaging out at around $70 – but BP was much more effective in cutting costs and implementing change.
The company said oil and gas production for the three months to September was 2.9m barrels of oil equivalent per day, similar to the same quarter last year.