Shell to axe 1,000 more jobs
Royal Dutch Shell today said it would cut another 1,000 jobs this year after reporting a 69 per cent slide in annual profits to 9.8 billion US dollars (£6.1 billion).
The Anglo-Dutch firm also reported a steep drop in fourth quarter earnings - down 75 per cent to 1.18 billion dollars (£738 million) - after pressure on margins in refining offset a year-on-year increase in oil prices.
Shell has cut 5,000 jobs in the past year and said it will remove another 1,000 in 2010 - mainly in downstream and corporate functions - to make it more competitive against rivals such as BP.
BP has moved ahead of its rival after chief executive Tony Hayward stripped costs out of the business and improved the group's refining performance.
The gap was highlighted earlier week when BP said fourth-quarter profits rose 33 per cent to 3.45 billion US dollars (£2.16 billion).
Shell chief executive Peter Voser said today his company was making "good progress" in its efforts to become more efficient.
"We have reduced complexity in the company, and our new organisation, announced in July 2009, is now fully up and running."
He admitted that trading conditions were tough in 2009 and were likely to remain challenging this year.
Mr Voser said: "Our fourth-quarter results were impacted by the weak global economy. Oil prices have increased compared to a year ago, but gas prices and refining margins have declined sharply, because of weaker demand and high industry inventory levels.
"We are not assuming that there will be a quick recovery, and the outlook for 2010 is uncertain."
Shell said production dropped by more than 2 per cent in the year, extending a run of declining output seen since 2003.
Royal Dutch Shell shares opened almost 2 per cent lower as today's figures were at the lower end of market expectations.
The fourth quarter included a loss of 1.76 billion US dollars (£1.1 billion) from its downstream operation, which includes refining and forecourt sales.
Mr Voser said: "Downstream is facing some tough times. There is a significant overhang of industry refining capacity, exacerbated by the economic downturn."
He said restructuring plans will look to refocus Shell's downstream operation into fewer, more profitable markets with growth potential.
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