Shell Announces 2,200 More Layoffs

Royal Dutch Shell has announced that it will be cutting an additional 2,200 jobs – over and above the layoffs previously planned as part of its merger with BG Group.

The oil major laid off 7,500 of its staff last year and already planned to reduce head count by 2,800 more following the merger. The new announcement brings the total to 12,500 by the end of 2016; Shell (with BG) has approximately 95,000 employees worldwide. 

"Despite the improvements that we have made to our business, current market conditions remain challenging," said Paul Goodfellow, Shell's vice president for UK & Ireland. Nearly 500 of the newly announced layoffs will come from his region; the firm began offering voluntary layoffs for UK & Ireland employees last month. 

Shell says that it expects the layoffs to be offset by hiring activity in information technology and at the graduate level. 

Shell's stock price rose three percent in trading Wednesday on rising crude futures. Despite recovering prices, upstream oil and gas remains a troubled market; Anadarko, Chevron and BP have all laid off employees in the first quarter of the year. Houston-based consultants Graves & Co. estimate that publically announced cuts total to more than 350,000 worldwide since the start of the industry downturn. What's more, the firm's president, John Graves, expects that the count underrepresents the number of people affected. "The majority of private companies in our industry employ less than 25 people or so,” below U.S. statutory reporting requirements, Graves told Rigzone. “The result is that the major untold story of the current downturn is private company layoffs.” 

In addition to eliminating redundancies following its merger with BG, Shell has also announced that it is looking to spin off selected upstream assets via an initial public offering. The IPO would probably consist of holdings in the UK, New Zealand, Italy, Norway and Nigeria; Shell suggests that it could be valued in the range of $40 billion.