Shell is set to reduce its workforce by hundreds within its oil and gas exploration operations as part of Chief Executive Wael Sawan’s strategy to achieve up to $3 billion (£2.3 billion) in cost savings by the end of next year.
The cuts, affecting around 20% of the workforce in two key subdivisions of Shell’s oil and gas business, will target roles involved in the company’s exploration strategy and development of oil and gas assets. The reductions will impact offices globally, with the most significant effects expected in Houston and The Hague, while its UK operations will see less impact. These job reductions are subject to ongoing consultations with employees.
A Shell spokesperson emphasized the company’s commitment to enhancing value while reducing emissions through increased performance, discipline, and simplification. “Shell aims to deliver structural operating cost reductions of $2 billion to $3 billion by the end of 2025, as outlined during our Capital Markets Day in June 2023. Achieving these reductions will necessitate portfolio optimization, new efficiencies, and a leaner organization,” the spokesperson said.
The affected operations are part of Shell’s upstream division, which generated over a third of the company’s $28 billion in adjusted profits last year. Since Sawan took over from Ben van Beurden as CEO in September 2022, he has shifted focus from reducing oil production to implementing a cost-cutting program aimed at boosting profitability.
Last year, Shell reported $40 billion in operating expenses and has previously cut jobs in its chemicals and wind sectors while centralizing functions such as legal and communications. In October, Shell also eliminated several positions from its low-carbon solutions division.
Earlier this month, Sawan reported $1.7 billion in cost savings achieved so far and affirmed his intention to continue simplifying organizational operations.
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