Coronavirus: Shell plans to cut up to 9,000 jobs

Yahoo Finance Staff
·2-min read
Shell's job cuts plan is part of its plan to move to a low-carbon economy. Photo: Aleksander Kalka/NurPhoto
Shell's job cuts plan is part of its plan to move to a low-carbon economy. Photo: Aleksander Kalka/NurPhoto

Royal Dutch Shell (RDSB.L) revealed that it will cut 7,000 to 9,000 jobs as part of a major restructuring plan to shift the oil and gas giant to low-carbon energy.

The jobs cuts equate to just over 10% of its workforce. Shell has 83,000 employees, according to its figures at the end of 2019.

The group confirmed in its third quarter update that the headcount cull is set save the group $2bn (£1.5bn) to $2.5bn by 2022.

Shell is the latest major energy company to announce sweeping cuts to save money after the spread of coronavirus hitting every part of the economy.

Demand has cratered and the outlook for oil is “even more fragile” than a month ago as the COVID-19 pandemic has forced more people to work from home. On top of that, a weak aviation sector also led to downward revisions for the third and fourth quarters, said the International Energy Agency (IEA).

The IEA has revised its outlook for global demand growth to 91.7 million barrels per day. This is a contraction of 8.4 million barrels per day year-on-year, more than the 8.1 million barrels per day contraction predicted by the agency in its August report.

READ MORE: IEA: 'Oil market 'even more fragile' than a month ago

In June this year, BP’s boss told staff that the company plans to cut 10,000 jobs from its global workforce by the end of 2020. This was announced just weeks after increasing payouts to shareholders.

BP said that it was part of plans to cut its operating costs by $2.5bn and that the move will “significantly impact senior levels” of management in the business, with top leadership roles to be cut by a third.

It said the majority of the redundancies will be made by the end of this year, after the business took a major hit from the coronavirus pandemic.

Watch: ‘Why job losses have risen despite the economy reopening’