Royal Dutch Shell announced on Wednesday that it plans to cut 7,000 to 9,000 jobs as part of the company’s cost-saving measures to mitigate the negative impact of the novel coronavirus (COVID-19) on weak global oil demand and low oil prices.
Ben van Beurden, CEO of Royal Dutch Shell, said in an interview released on the company’s website that the company needs to achieve a sustainable annual cost saving of between $2-2.5 billion.
The cuts would include 1,500 people who were taking voluntary redundancy.
“We do not have an exact figure because the details are still being worked out, and we have never had a target to reduce a particular number of jobs. But we can say that, because of the efficiencies we expect to gain, we will reduce between 7,000 and 9,000 jobs by the end of 2022,” Van Beurden said.
Stressing that cost reductions are essential to remaining competitive, Beurden said the company was also searching for other cost savings in travel and the use of contractors and are “looking at other opportunities, like virtual working.”
- ‘We have to change the type of products that we sell’
Speaking on Shell’s zero-carbon target by 2050, Beurden said this transformation is a dramatic change for Shell, “which includes changes to our business plans over time.”
“We have to be net-zero in all our operations, which means major changes at refineries, chemicals sites, on-shore and offshore production facilities. But it also means that we have to change the type of products that we sell. You cannot do that by just having different products which still produce emissions,” he said.
The company will have some oil and gas in the energy mix in its sales by 2050, he said but added that the company will focus on predominantly low-carbon electricity, low-carbon biofuels and hydrogen.
By Sibel Morrow