Royal Dutch Shell provided a trading update for the third quarter 2020 and announced it would be planning to cut jobs as it looks to make annual cost savings.
Shell said in its trading update that they expected job reductions of 7,000 to 9,000 (including around 1,500 people who have agreed to take voluntary redundancy this year) by the end of 2022. This is about 10 per cent of Shell’s overall workforce.
The reduction of its organisational complexity, along with other measures, is expected to deliver sustainable annual cost savings of between $2 to $2.5 billion by 2022, Shell said in a statement.
Ben van Beurden, Chief Executive Officer of Shell discussed in an interview how Shell has responded to the COVID-19 pandemic, explaining the drive behind the enhanced ambition to be a net-zero emissions energy business, and outlining the direction of the ongoing restructuring of Shell’s ways of working and organisation.
He commented on the job cuts: " It is very painful to know that you will end up saying goodbye to quite a few good people. I know I, and many others in Shell, will be saying goodbye to people we know well and really like and who have great loyalty to the company. But we are doing this because we have to, because it is the right thing to do for the future of the company."
He added: " We have to be a simpler, more streamlined, more competitive organisation that is more nimble and able to respond to customers."
On the exact numbers Shell's CEO stated: "We do not have an exact figure because the details are still being worked out, and we have never had a target to reduce a particular number of jobs. But we can say that, because of the efficiencies we expect to gain, we will reduce between 7,000 and 9,000 jobs by the end of 2022. This includes around 1,500 people who have already agreed to take voluntary redundancy this year, but excludes any who may leave Shell because of divestments. Along with the other measures we will take, we should achieve a sustainable annual cost saving of between $2-2.5 billion."