Shell axes another 1,000 jobs

Click to follow
The Independent Online

Oil giant Royal Dutch Shell announced a further 1,000 job cuts today as the Anglo-Dutch firm admitted it had been slow to respond to the global slump.

The group, which has 100,000 staff worldwide, cut 5,000 posts last year and had already announced a further 1,000 job losses for this year.

Chief executive Peter Voser said the group would axe another 1,000 posts by the end of 2011 as he presented his strategic update for the firm.

"The company had become too complicated and slower to respond than we'd like. So we are sharpening up," he said.

Shell gave no details on where the cuts would fall. It employs around 8,500 staff in the UK at sites including Aberdeen, London and the Stanlow refinery in Ellesmere Port, which is up for sale.

Mr Voser said Shell is entering a "new period of growth" as he pledged to turn around years of underperformance and grow production 11% to 3.5 million barrels a day by 2012.

While record oil prices boosted the profits of the industry in 2008, they slumped as the recession hit home last year. Shell has lagged behind rivals such as BP in cutting costs to fit the new climate.

Mr Voser added: "The priorities are for a more competitive performance, for growth and for sharper delivery of strategy.

"We have more to do to drive out cost and improve the operating performance in the company."

Shell expects a strong increase in cashflow from projects coming on stream over the next three years and said it is assessing at least 35 new projects to underpin a "new wave" of production growth until 2020.

The group, which said it has one of the "most ambitious investment programmes in the industry", plans net annual spending of up to 27 billion US dollars (£18 billion) in the three years to 2014.

Refining margins however have been hammered by the recession and a glut of refining capacity.

While oil prices have hovered around 80 dollars a barrel Shell has been hit harder than others due to its higher exposure to refining and natural gas, where Mr Voser said "margins are hard-wired to the economy".

The group plans to focus on its most profitable downstream areas by selling around 15% of its refining capacity as well as 35% of its retail business.

Shell expects oil to trade at the upper end of a 50 to 90 dollar a barrel range - supporting its upstream production business - although it warned global refining "may be in over-supply for some time".

Comments