Shell to Cut about 400 Jobs at Dutch Operations

Royal Dutch Shell plc, a British-Dutch multinational oil and gas company, is planning a 400-job cut in the Netherlands, primarily at its major projects and energy technology operations, while the company changes its business model as the oil prices decrease.

The decision comes as the oil giant refocuses its portfolio with a $30 billion divestment programme.

Shell, which is the world’s second-largest oil company in terms of market capitalization, said in a statement that approximately 400 staffs are potentially at risk of losing jobs in the last quarter of 2017 or first half of 2018, as an aftermath of the projected changes to the structure and ways of working on  Projects and Technology organization. It also said that some employees may be moved to “alternative roles.”

The company employs 92,000 worldwide, and approximately 10,000 in the Netherlands.

“Shell is transforming into a simpler company, through re-shaping of the portfolio and structural change in our culture and ways of working, in order to be more competitive and resilient through the cycle, delivering stronger returns,” a Shell spokeswoman said. “The final impact is not known and will be subject to engagement with our employees and our employee representative,” the company added.

“We anticipate some of the employees involved in the changes will secure alternative roles within the Shell.”

The projected restructuring, which also views dozens of research roles shift from the Netherlands to Bangalore, India, emphasizes how lower oil prices are motivating the oil giant company to move away from the huge projects which have been the company’s concentration for over 20 years.

In addition to employment cuts, Shell wants to lessen costs by outsourcing more “lower value-adding” design work, cutting the number of workers on costly expatriate employment packages and reducing layers of management in its project and technology operations.

“The industry as a whole has become less efficient over the last 1-2 decades, whilst automotive, aerospace, solar and wind, for example, have become more efficient,” the company said.

Moreover, the oil industry has reduced employment, including around 12,500 at Shell, and capital investment funds in recent years as lower oil prices have rendered a lot of  previously profitably projects uneconomic.

Analysts say strong production and lower operating costs at U.S. shale oil fields mean a significant retrieval from the around $50 per barrel level, while the second quarter has seen a rebound in many companies’ earnings.

Meanwhile, Royal Dutch Shell plc traded 1.31%, or 0.31, to 24.01 euro. It opened in 23.84 euro, with a session high of 24.06 euro, and a session low of 23.76 euro. Its market capitalization was 196.98 billion euro, with a P/E ratio of 28.96, and a dividend yield of 7.18%.

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