Shell moves to restructure business, including job cuts of up to 9,000 by end-2022

Multinational oil and gas company Shell has announced a major restructuring, in a move tackle the impact COVID-19 has had on the business.

Talking about this in an interview posted on the company's website, Ben van Beurden, Chief Executive Officer, Royal Dutch Shell, said this meant Shell's traditional business would be more 'focused'.

He explained: "That means Upstream – the part of Shell that deals with exploring for and producing oil and gas – will be run to ensure a strong flow of cash to Shell. We will continue to invest, but it will not be about how many barrels of oil, or cubic feet of gas, Upstream produces, but how much it adds to the bottom line.

"The projects we invest in will be highly valuable. Upstream will be critical to Shell as we change – we need it to be very successful, so we have the financial strength to invest further in our lower-carbon products."

In the process, van Beurden noted that there will be job cuts, in order for the company to be come more "a simpler, more streamlined, more competitive organisation that is more nimble and able to respond to customers."

While there is no definite figure, the number of jobs reduced is expected to be between 7,000 and 9,000 by end-2022. This includes around 1,500 people who have already agreed to take voluntary redundancy this year, but excludes any who may leave Shell because of divestments.

Citing the thought behind this move, van Beurden said: "We have looked closely at how we are organised and we feel that, in many places, we have too many layers in the company: too many levels between me, as the CEO, and the operators and technicians at our locations. We have also found that there are many people in the middle of our organisation who have a relatively small number of people reporting to them. 

"In some cases there are good reasons for that, but as a principle we are looking to remove that complexity, and cost, so we can be the nimble, efficient and customer-focused company we need to be."

Human Resources Online has reached out to a spokesperson for expected numbers in Asia, and job roles to be affected and will update this story accordingly. 

Apart from this, the company will also be looking at other costs too, including travel and the use of contractors.

"And we are looking at other opportunities, like virtual working. COVID-19 has shown we can work very effectively in ways we did not think we were ready for yet. But a large part of the cost saving for Shell will come from having fewer people," van Beurden added.

As such, along with all the measures the company will take, van Beurden noted that "we should achieve a sustainable annual cost saving of between $2-2.5 billion".

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