Business

Shell to slash up to 9,000 jobs amid dip in oil demand

Oil giant Royal Dutch Shell said it plans to cut up to 9,000 jobs by the end of 2022 under a corporate restructuring as the company deals with a drop in demand for fuel.

Shell expects the layoffs — which could affect more than 10 percent of its global workforce of 83,000 — to save as much as $2.5 billion in annual expenses when combined with other cost-cutting measures. The cuts include about 1,500 people who have already agreed to take “voluntary redundancy” this year, CEO Ben van Beurden said.

“We have to be a simpler, more streamlined, more competitive organization that is more nimble and able to respond to customers,” van Beurden said in a statement. “To be more nimble, we have to remove a certain amount of organizational complexity.”

The cuts are part of Shell’s plan to become more environmentally friendly and reduce its emissions to “net zero” by 2050, according to van Beurden. They also come after a massive plunge in demand for oil this year as the coronavirus pandemic disrupted the energy industry.

Rival oil producer BP similarly announced plans in June to cut nearly 10,000 jobs in response to the pandemic, which also sparked a drop in oil prices. BP has also announced an effort to bring its emissions to net zero and focus more on renewable energy.

Shell also updated its production estimates Wednesday, saying it expects to have produced 2.15 million to 2.25 million barrels of oil a day in the third quarter. The company previously projected third-quarter production of 2.1 to 2.4 million barrels a day.

With Post wires