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UPDATE 2-Shell plans to cut up to 9,000 jobs in transition plan

Wed, 30th Sep 2020 07:21

* Cuts represent over 10% of Shell's workforce

* Shell's Q3 oil and gas output down sharply

* Fuel sales recover as coronavirus lockdowns eased
(Adds detail, graphics)

By Ron Bousso

LONDON, Sept 30 (Reuters) - Royal Dutch Shell
announced on Wednesday plans to cut up to 9,000 jobs, or over
10% of its workforce, as part of a major overhaul to shift the
oil and gas giant to low-carbon energy.

Shell, which had 83,000 employees at the end of 2019, said
that the reorganisation will lead to annual savings of $2
billion to $2.5 billion by 2022.

Last month it launched a broad review of its business aimed
at cutting costs as it prepares to restructure its operations as
part of the shift to low-carbon energy.

The Anglo-Dutch company said it expected to cut 7,000 to
9,000 jobs by the end of 2022, including some 1,500 people who
have agreed to take voluntary redundancy this year.

Rival BP this year announced plans to cut around
10,000 jobs as part of CEO Bernard Looney's plans to rapidly
expand its renewables business and reduce oil and gas
production.

Reducing costs is vital for Shell's plans to move into the
power sector and renewables where margins are relatively low.

Competition is also likely to intensify with utilities and
rival oil firms including BP and Total all battling
for market share as economies around the world go green.

FUEL SALES RECOVERY

In an operations update, Shell also said its oil and gas
production was set to drop sharply in the third quarter to
around 3,050 barrels of oil equivalent per day due to lower
output as a result of the coronavirus pandemic and hurricanes
that forced offshore platforms to shut down.

Shell, the world's largest fuel retailer, saw a recovery in
fuel sales in the third quarter from lows hit in the previous
quarter as some countries gradually emerged from lockdown
measures.

In the second quarter, Shell narrowly avoided its first
quarterly loss in recent history, helped by a booming trading
business. It however announced nearly $16.8 billion in
impairment charges after sharply lowering its outlook for oil
and gas prices in the wake of the pandemic.

Shell said it will take another impairment charge of $1 to
$1.5 billion in the third quarter.

(Reporting by Ron Bousso; editing by Louise Heavens and Jason
Neely)

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