Royal Dutch Shell announced on Wednesday (September 30) plans to cut up to 9,000 jobs – that’s over 10% of its workforce.
With pressure on energy giants to go green, it’s part of a major overhaul to shift the oil and gas producer to low-carbon energy.
Shell, which had 83,000 employees at the end of 2019, says the reorganization will mean additional annual savings of around 2 to 2.5 billion US dollars by 2022.
That’s on top of cost cuts of 3 to 4 billion dollars announced earlier this year.
Shell shares were up around 1% in early trade Wednesday.
Last month it launched a broad review of its business aimed at cutting costs.
That as it prepares to restructure operations as part of the shift to low-carbon energy.
The company said it expected to cut 7,000 to 9,000 jobs by the end of 2022, including some 1,500 people who’ve agreed to take voluntary redundancy this year.
Rival BP this year announced plans to cut around 10,000 jobs as part of plans to rapidly expand its renewables business and reduce oil and gas production.
Reducing costs is vital for Shell’s plans to move into the power sector and renewables, where margins are relatively low.
In the second quarter it reported impairment charges of almost 17 billion dollars, and narrowly avoided its first quarterly loss in recent history.