Shell to slash 9,000 jobs in low-carbon overhaul

Shell, the world’s largest fuel retailer, faces intense competition from rivals in the race for market sha)re as economies around the world go green. (Shutterstock)
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Updated 01 October 2020

Shell to slash 9,000 jobs in low-carbon overhaul

  • Oil and gas giant looks to $2bn annual savings as part of major restructure

LONDON: Royal Dutch Shell announced on Wednesday plans to cut up to 9,000 jobs, or over 10 percent of its workforce, as part of a major overhaul to shift the oil and gas giant to low-carbon energy.

Shell, which had 83,000 employees at the end of 2019, said that the reorganization will lead to annual savings of $2 billion to $2.5 billion by 2022.

Last month it launched a broad review of its business aimed at cutting costs as it prepares to restructure its operations as part of the shift to low-carbon energy.

The Anglo-Dutch company said it expected to cut 7,000 to 9,000 jobs by the end of 2022, including some 1,500 people who have agreed to take voluntary redundancy this year.

Rival BP this year announced plans to cut around 10,000 jobs as part of CEO Bernard Looney’s plans to rapidly expand its renewables business and reduce oil and gas production.

Reducing costs is vital for Shell’s plans to move into the power sector and renewables where margins are relatively low. Competition is also likely to intensify with utilities and rival oil firms including BP and Total all battling for market share as economies around the world go green.

In an operations update, Shell also said its oil and gas production was set to drop sharply in the third quarter to around 3,050 barrels of oil equivalent per day due to lower output as a result of the coronavirus pandemic and hurricanes that forced offshore platforms to shut down.

Shell, the world’s largest fuel retailer, saw a recovery in fuel sales in the third quarter from lows hit in the previous quarter as some countries gradually emerged from lockdown measures.

In the second quarter, Shell narrowly avoided its first quarterly loss in recent history, helped by a booming trading business. It however announced nearly $16.8 billion in impairment charges after sharply lowering its outlook for oil and gas prices in the wake of the pandemic.

Shell said it will take another impairment charge of $1 to $1.5 billion in the third quarter.


Nvidia deal for Arm will drive computing power growth, says SoftBank’s CEO

Updated 49 min 24 sec ago

Nvidia deal for Arm will drive computing power growth, says SoftBank’s CEO

  • Saudi Arabia's Public Investment Fund (PIF) is an anchor investor in the $100 billion Vision Fund

TOKYO/DUBAI: SoftBank Group Corp. CEO Masayoshi Son said on Thursday the sale of chip designer Arm to Nvidia Corp. will drive growth in computing power, in his first public comments since the $40 billion deal was announced in September.
Son made the comments at a virtual summit about artificial intelligence hosted by Saudi Arabia, an anchor investor in the $100 billion Vision Fund, at which he reiterated his belief that AI would transform society.
The Nvidia deal, part of a series of asset sales by Son, whose group has been shaken by soured investments and the COVID-19 pandemic, has raised concerns it will threaten Arm’s role as a neutral supplier in the industry.
Son is set to speak next week with Nvidia CEO Jensen Huang at SoftBank World, the group’s annual event for customers and suppliers that is being retooled as it focuses on investing.
SoftBank’s growing cash pile is driving speculation about future investment plans, with the Vision Fund targeting external funding for a blank-check company, a source said, in a sign the group is regaining its mojo.
“I am a risk taker,” Son said on Thursday.
Rajeev Misra, CEO of SoftBank Investment Advisers which oversees the Vision Fund, said the market share gained by online commerce companies in the last six to eight months is more than what they gained in the previous four years put together.
“COVID has accelerated the acceleration of AI even further,” Misra told the same conference, adding in the 105 companies Vision Fund 1 and 2 have invested in, artificial intelligence is the core of their businesses.