Shell to Cut Jobs as Cheap Oil Hurts Profits
THE HAGUE, Netherlands — Royal Dutch Shell plc will cut 6,500 jobs as it restructures and liquidates businesses in response to continued lower gas prices.
"Today's oil price downturn could last for several years, and Shell's planning assumptions reflect today's market realities," Royal Dutch Shell CEO Ben van Beurde said. "The company has to be resilient in today's oil price environment, even though we see the potential for a return to a $70-$90 oil price band in the medium term."
During an interview with Bloomberg, van Beurden added the job cuts were due to "a multiplicity of programs that we have going on throughout the company, focusing on bottom line improvements and...restructuring and exiting businesses."
In addition to the job cuts, Shell will trim operating costs by $4 billion and capital expenditure plans will be lowered by $7 billion this year.
According to The Associated Press, Shell’s 2015 second-quarter net income fell 25 percent year over year to $3.99 billion.
The oil company’s moves will not affect its $70 billion merger with Britain’s BG Group. Once completed, the transaction will make The Hague-based Shell the biggest global producer of liquefied natural gas. Shell is also expected to enjoy costs savings of $2.5 billion a year once the BG acquisition is completed.