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LONDON: Energy company Shell unveiled on Wednesday (September 30) a major restructuring to combat the drop in oil prices driven by the coronavirus pandemic, warning that it will also lead to further asset writedowns in the third quarter.
Royal Dutch Shell said in a statement that it would cut between 7,000 and 9,000 positions by the end of 2022, of which 1,500 employees have already agreed to take voluntary layoff this year.
The job cuts would amount to about 10 percent of Shell’s total global workforce of 80,000 employees in more than 70 countries.
The Anglo-Dutch giant aims to generate annual savings of between US $ 2 billion and US $ 2.5 billion (1.7-2.1 billion euros) under the plan, which also includes other measures to streamline the business in response to the consequences of the COVID-19 crisis. .
Those savings will partially contribute to the US $ 3-4 billion efficiency drive that was announced in March and will run through 2021, he added.
Shell had already signaled in July that job cuts were in the pipeline after posting a colossal net loss of $ 18.1 billion in the second quarter as the coronavirus hit the global oil market.
It warned on Wednesday that it would suffer more after-tax impairment charges of between $ 1 and $ 1.5 billion in third-quarter earnings, to be released in late October.
“This is an extremely difficult process. It is very painful to know that you will end up saying goodbye to quite a few good people,” Chief Executive Ben van Beurden said in an interview on the company’s website.
“But we are doing it because we have to, because it is the right thing to do for the future of the company.
“We have to be a simpler organization, more optimized, more competitive, more agile and capable of responding to customers.”
Shell’s main British rival, BP, is cutting around 10,000 jobs or 15 percent of its total workforce in response to the virus turmoil.
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