- Royal Dutch Shell PLC announced plans to slash 6,500 jobs Thursday amid a slump in oil prices that has sent a wave of job cuts rippling through the industry.
- Shell’s job reductions came as Chevron Corp. said Wednesday it would cut 1,500 jobs, while U.K. utility Centrica PLC said Thursday it would slash 600 positions and work to shrink its oil-and-gas production division.
- Even deeper cuts have emerged this week at oil services firms, which big energy companies are squeezing for savings; Saipem SpA of Italy, for instance, said it would slash 8,800 jobs over the next two years.
- The moves demonstrate how energy companies are moving to slash further to cope with a sustained oil price collapse that they now see lasting for a longer time. Shell, BP PLC, France’s Total SAand Eni SpA of Italy have all outlined plans in their second quarter results to deepen spending cuts that began earlier this year when oil prices reached lows below $50 a barrel, down from highs of $114 a barrel last year.
- Shell’s job cuts were announced along with second-quarter earnings that saw its profit fall by 33% from the same period last year, to $3.4 billion compared with $5.1 billion on a current cost of supplies basis—a measure similar to the net income reported in the U.S. As with its peers, Shell’s exploration and production, or upstream business, suffered worst, tumbling to $774 million, down nearly 80% from a year earlier.
- Shell’s oil production fell 11% to 2.7 million barrels of oil equivalent as the company undertook maintenance at several fields and continued a $20 billion divestment program due to complete at the end of the year.
Source: Wall Street Journal