Thousands of jobs to be axed after substantial drop in profits

Syed Umarullah HussainiWeb Editor

30th Sep, 2020. 11:52 am

The Oil company Royal Dutch Shell has announced the biggest job cut in response to the global plunge in oil prices.

According to the details, the company is looking forward to repositioning itself as a green energy provider.

The company said in a statement that this job cut would be implemented by 2022.

As per the statement, “The novel coronavirus has caused international demand for oil to plummet.”

“Brent crude futures started the year at close to $70 per barrel but tumbled below $20 a barrel at the peak of the pandemic.”

Third-quarter earnings of the energy giant were expected to be “at the lower end of the $800m to $875m range”.

Shell, the energy giant which employs 83,000 people worldwide, has been hit by a drastic drop in profits since the COVID-19 pandemic struck.

It saw a 46% fall in first-quarter net income to $2.9bn (£2.3bn), while second-quarter income fell 82% to $638m.

However, the Royal Dutch Shell is in the midst of a cost-cutting drive that is expected to deliver annual savings of $2bn to $2.5bn by two years later.

Quick Action Required

Chief executive Ben van Beurden said in his statement said “We have had to act quickly and decisively and make some very tough financial decisions to ensure we remained resilient, including cutting the dividend.

In addition to this, he said “But as hard as they were, they were entirely the appropriate choices to make.”

“And Covid-19 has hit us in another way. We have, very sadly, lost six employees and six contractor colleagues to the virus.”

Net-zero emissions

Mr van Beurden reiterated that the Royal Dutch Shell intended to become a net-zero emissions energy business by 2050 or sooner.

That meant the company had to change the type of products it sold, he said.

Furthermore, he said that “We will have some oil and gas in the mix of energy we sell by 2050, but it will be predominantly low-carbon electricity, low-carbon biofuels, it will be hydrogen and it will be all sorts of other solutions too,”

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