Royal Dutch Shell said it will need to cut at least another 2,200 jobs, mainly due to Shell’s takeover of the BG Group and lingering low crude oil prices. Since mid-2014, North Sea/Brent crude oil prices have declined from more than USD 110 per barrel to below USD 40 per barrel.
The latest lay-offs will be implemented by the end of 2016, which will bring the total number of job losses at Shell from the start of 2015 to the end of 2016 to at least 12,500. Around 475 of the most recent job cuts will be made in the UK and Ireland.
The company posted the steepest decline in annual earnings in 13 years last year, from USD 19 billion in 2014 to USD 3.8 billion in 2015.
“Despite the improvements that we have made to our business, current market conditions remain challenging,” said Shell UK and Ireland Vice President Paul Goodfellow.
“Our integration with BG provides an opportunity to accelerate our performance in this ‘lower for longer’ environment.
“We need to reduce our cost base, improve production efficiency and have an organisation that best fits our combined portfolio and business plans,” he said.
At the end of 2015, Shell employed around 90,000 people globally and BG employed around 4,600.