Energy giant, The Royal Dutch Shell has announced plans of reducing its number of jobs from between 7,000 and 9,000 by the end of the year 2022.
In a release sited by The Vaultz, The Chief Executive Officer of Shell, Ben Van Beurden revealed this, saying that, the reductions form part of plans by the company to undergo a major restructuring process in order to enable them have a simpler, more streamlined, more competitive organization, that is more nimble and able to respond to customers.
Explaining further as to why the company will cut down jobs, the CEO said that, the move was right thing to do for the future of the company.
“We do not have an exact figure because the details are still being worked out, and we have never had a target to reduce a particular number of jobs. But we can say that, because of the efficiencies we expect to gain, we will reduce between 7,000 and 9,000 jobs by the end of 2022. This includes around 1,500 people who have already agreed to take voluntary redundancy this year, but excludes any who may leave Shell because of divestments.”
Van Beurden also disclosed that, the move was to reduce an amount of organizational complexity and in addition ensure the company was making the best of the core capabilities needed to succeed.
“At the moment our staff are dispersed through the company’s organizational structure, so we will bring them all into one place. That same is true for the whole deal-making capability, or the way we make our voice heard: we will bring our people with those skills together in one structure.”
Touching on other aspects which influenced the reduction, he revealed that, the move was going to simplify how things are done and also save cost adding that, reducing cost was essential to them and also because Shell has to be competitive.
“We have looked closely at how we are organized and we feel that, in many places, we have too many layers in the company: too many levels between me, as the CEO, and the operators and technicians at our locations. We have also found that there are many people in the middle of our organization who have a relatively small number of people reporting to them. In some cases, there are good reasons for that, but as a principle we are looking to remove that complexity, and cost, so we can be the nimble, efficient and customer-focused company we need to be.
“We are looking at other costs too, of course, like travel and the use of contractors. And we are looking at other opportunities, like virtual working. COVID-19 has shown we can work very effectively in ways we did not think we were ready for yet. But a large part of the cost saving for Shell will come from having fewer people.”
He further went on to say that, along with the other measures the company will take, it should achieve a sustainable annual cost saving of between $2-2.5 billion adding that, once the reorganization is complete, many more people will be positively affected.
