February 2016, Vol. 243, No. 2

Features

Shell Confirms 10,000 Job Cuts

Shell will lay off 10,000 staff and direct contractor positions as it merges with the BG Group while also dealing with the effects of falling oil prices.

In a written statement early Thursday, CEO Ben Van Beurden said, “The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company, and improving shareholder returns.”

The announcement came following a fourth quarter in which the U.K. incorporated company, headquartered in The Netherlands,  posted a 44% drop in earnings. Shell did not indicate which areas will lose positions.

Royal Dutch Shell announced its purchase of British rival BG Group for $69.7 billion in cash and stock on April 8.

Analysts at Wood Mackenzie said at the time low prices are gradually prompting most major oil companies to weigh acquisitions, though only a few have the size and resources to pull off a mega-merger.

“If you’re looking to the next big deal, ExxonMobil stands out as most likely to pull the trigger,” Wood Mackenzie wrote in a research note.

PGJ staff report