Royal Dutch Shell CEO Ben van Beurden has announced that the company will cut more than 10,000 jobs in order to save $15bn in preparation of its impending acquisition of BG Group.
In an attempt to cut operating costs, investment across the firm has been cut by $8 billion in 2015 compared with 2014, spending has been cut, the firm will also sell $30 billion worth of assets in its severe cost-saving efforts as it battles against record low oil prices.
Commenting on the merger, van Beurden said: “Bold, strategic moves shape our industry. The completion of the BG transaction, which we are expecting in a matter of weeks, will mark the start of a new chapter in Shell, to rejuvenate the company and improve shareholder returns.”
Additionally, Shell’s statement on the job cuts further emphasised this: “Together, these actions will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies, as streamlining of the two companies continue.”
Shell’s operating costs reduced by approximately $4 billion in 2015 – a reduction of 10% - and the company further expects its costs to fall by another $3 billion over the next year. The company also announced last its 2015 cost and efficiency program was on track to deliver at least $300 million in savings.
Commenting on the decline of the oil industry and the likelihood of more cost-cutting measures, van Beurden said: “Flexibility for further reductions is available and will be utilised should conditions warrant that.”
The oil giant is still awaiting official shareholder approval prior to the merger going ahead. Shareholders will vote next week to approve or reject the deal.
