Following the falling oil prices, Royal Dutch Shell, has axed 6,500 jobs as part of plans to cut costs. The job cuts comprised part of its $4bn reduction in operating costs.
According to the oil giant, with no quick end to the slump in oil prices, it has planned to further slash annual spending, sell off assets and bring the total number of job cuts to 6,500 by the end of 2015.
The job cuts affected contractors as well as Shell employees, and included job losses at its operations in the North Sea and cuts resulting from divestment in Nigeria.
Shell, which currently employs about 94,000 people, said it is also scaling back its oil exploration operations. The firm announced profits of $3.4bn in the three months to 30 June, a 35% decrease compared with last year.
The Chief Executive Officer (CEO) of Shell, Ben van Beurden: “We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery.”
“We’re taking a prudent approach, pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends for shareholders.”
The oil price per barrel about as at last June was $115 but with recent slump in oil price, has hit a fast drop to $54 per barrel.
By the end of 2015 the cumulative total of all job cuts so far will be 6,500 – including contract staff. However, Shell said it was too early to say how many more would go as spending is further reduced and more assets are sold.