5,000 jobs to go at Shell as profits plunge 73 per cent

Cost-cutting plan will strip out 10 per cent of the company's global workforce

Royal Dutch Shell plans to cut 5,000 jobs as part of cost-cutting to mitigate the impact of the falling oil price.

Shell announced the proposal yesterday alongside third-quarter results showing that profits are down 73 per cent. While they came in far below last year's $10.9bn (£6.6bn), profits for this year's third quarter, at $2.99bn, nonetheless beat analysts' predictions.

The oil price has recovered considerably this year and is currently hovering around the $75 per barrel mark, compared with not much more than $30 in January. But Shell's outlook is still bleak, and although the dividend will rise 5 per cent to $0.42 per share – taking the total payout for the quarter to $2.7bn – the company warned it could yet be frozen next year.

Peter Voser, the chief executive, said: "We see some indications that energy demand and pricing are improving, but the outlook remains very uncertain, and we are not expecting a quick recovery.

"Despite Shell's good operating performance in this difficult environment, we have embarked on an ambitious programme of stringent measures to further improve our performance," he said.

Mr Voser took over from predecessor Jeroen van der Veer in early July, and immediately launched a restructuring programme in an effort to simplify the business, speed up implementation and cut costs.

In the first nine months of the year, Shell saved $1bn, excluding the effect of exchange-rate fluctuations and non-cash pension costs – reduced by the recent equity markets upturn. The first phase of the restructuring plan cut 150 out of some 600 senior management posts. Most of the redundancies revealed yesterday, which will affect around 10 per cent of the group's 50,000 staff, will be in the UK, US and the Netherlands.

The cost of the programme is likely to add several hundred million dollars to the company's fourth-quarter charges, Shell acknowledged at its results announcement yesterday.

Despite the difficult economic circumstances, several oil and gas majors have reported results this week that came in better than expected.

At BP, the cost-cutting plan is going so well that it aims to hit a newly raised target of $4bn in savings by the end of this year. And profits, while down 50 per cent year on year, beat forecasts by $1.5bn. BG's 44 per cent drop in profits, to £484m, also beat expectations.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Beverley James: Accounts Payable

£22,000 - £23,000: Beverley James: Are you looking for the opportunity to work...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower