Energy

Shell Fires 10,000 Workers

Douglas A. McIntyre

Published: January 20, 2016 4:38 am

Last Updated: January 13, 2020 2:51 pm

As its fortunes collapse due to falling oil prices, Royal Dutch Shell PLC (NYSE: RDS-B) will fire 10,000 people in an effort to bolster margins.

Shell’s drive to improve competitive performance is delivering at the bottom line. Operating costs have reduced by $4 billion, or around 10% in 2015, and the company expects Shell’s costs to fall again in 2016 by a further $3 billion. Synergies from the BG combination will be in addition to that. Together, these actions will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies, as streamlining and integration of the two companies continue.

It is no wonder Shell posted terrible results:

When Shell announces its results on 4 February 2016, Shell’s fourth quarter 2015 earnings on a current cost of supplies (“CCS”) basis excluding identified items are expected to be in the region of $1.6 – 1.9 billion. This includes Upstream of $0.4 – 0.5 billion, of which Integrated Gas some $1.6 – 1.9 billion, and Downstream of $1.4 – 1.6 billion, of which Oil Products some $1.3 – 1.4 billion and Chemicals some $0.1 – 0.2 billion. Full year 2015 earnings on a CCS basis excluding identified items are expected to be in the region of $10.4 – 10.7 billion.