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Shell (RDS.A) to Slash 330 Jobs in North Sea Amid Coronavirus
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Royal Dutch Shell is permanently slashing headcount by 330 at its North Sea operationsin Aberdeen, Scotlanddue to the plaguing pandemic’s adverse impact on global energy demand, per sources.
The job cut, which will affect mostly office-based positions, is expected to be carried out over the next couple of years, thus reducing the company’s workforce to 1,000 in the Scottish city. Meanwhile, some of the lay-offs will be due to the planned decommissioning of the Brent Charlie platform, which is likely to be concluded within two years’ time.Nonetheless, Shell will still be dedicated to the main activities in North Sea and keep funding operations in that zone.
This strategic downsizing move is part of the company’s four-month old announcement to retrench 7,000-9,000 staff by the end of 2022. The action will affect 10% of its total personnel including 1,500 people who voluntarily agreed to exit the company this year. Shell expects the overhaul to deliver annual cost savings of up to $2.5 billion by next year.
Even though oil is currently trading at multi-month highs on vaccine optimism, the commodity is facing a lot of downward risks on mobility curbs and the lingering pandemic impact. As a result, the outlook for all industries in the energy sector business seems lackluster. Such a bleak scenario even induced some of the super major energy companies to shift to cleaner fuels and low-carbon energy. Thus, energy players are limiting their capital budgets by cutting costs and simplifying the corporate structure as it moves away from fossil fuels.
Last year, oil supermajor and Shell’s continental rival BP plc. (BP - Free Report) announced plans to trim nearly 10,000 positions as it plans to lower its oil and gas production volumes and focus more on expanding its renewables business.
Another supermajor Chevron Corporation (CVX - Free Report) is trimming headcount by nearly 10-15%, indicating an approximatelayoff of 6,000 of its 45,000 non-gas station staff. This move is in line with the company’s continued portfolio rationalization to drive its operational efficiencies and match the projected activity levels.
Further, oil biggie Exxon Mobil Corporation (XOM - Free Report) is considering reducing personnel across its worldwide operations, per Reuters. The report also confirms the integrated energy major’s voluntary redundancy program in Australia.
About Shell
This currently Zacks Rank #3 (Hold) energy player belongs to a global group of energy and petrochemical companies. It is involved in all phases of the petroleum industry from exploration to final processing and delivery. The company is scheduled to release fourth-quarter 2020 earnings results on Feb 4, 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Shell (RDS.A) to Slash 330 Jobs in North Sea Amid Coronavirus
Royal Dutch Shell is permanently slashing headcount by 330 at its North Sea operationsin Aberdeen, Scotlanddue to the plaguing pandemic’s adverse impact on global energy demand, per sources.
The job cut, which will affect mostly office-based positions, is expected to be carried out over the next couple of years, thus reducing the company’s workforce to 1,000 in the Scottish city. Meanwhile, some of the lay-offs will be due to the planned decommissioning of the Brent Charlie platform, which is likely to be concluded within two years’ time.Nonetheless, Shell will still be dedicated to the main activities in North Sea and keep funding operations in that zone.
This strategic downsizing move is part of the company’s four-month old announcement to retrench 7,000-9,000 staff by the end of 2022. The action will affect 10% of its total personnel including 1,500 people who voluntarily agreed to exit the company this year. Shell expects the overhaul to deliver annual cost savings of up to $2.5 billion by next year.
Even though oil is currently trading at multi-month highs on vaccine optimism, the commodity is facing a lot of downward risks on mobility curbs and the lingering pandemic impact. As a result, the outlook for all industries in the energy sector business seems lackluster. Such a bleak scenario even induced some of the super major energy companies to shift to cleaner fuels and low-carbon energy. Thus, energy players are limiting their capital budgets by cutting costs and simplifying the corporate structure as it moves away from fossil fuels.
Last year, oil supermajor and Shell’s continental rival BP plc. (BP - Free Report) announced plans to trim nearly 10,000 positions as it plans to lower its oil and gas production volumes and focus more on expanding its renewables business.
Another supermajor Chevron Corporation (CVX - Free Report) is trimming headcount by nearly 10-15%, indicating an approximatelayoff of 6,000 of its 45,000 non-gas station staff. This move is in line with the company’s continued portfolio rationalization to drive its operational efficiencies and match the projected activity levels.
Further, oil biggie Exxon Mobil Corporation (XOM - Free Report) is considering reducing personnel across its worldwide operations, per Reuters. The report also confirms the integrated energy major’s voluntary redundancy program in Australia.
About Shell
This currently Zacks Rank #3 (Hold) energy player belongs to a global group of energy and petrochemical companies. It is involved in all phases of the petroleum industry from exploration to final processing and delivery. The company is scheduled to release fourth-quarter 2020 earnings results on Feb 4, 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>