Royal Dutch Shell this week announced plans to cut an additional 2,200 jobs after its £35bn takeover of BG Group in February.
The Anglo-Dutch oil firm said had previously said it expected to shed 2,800 staff as a result of the deal with BG BG, on top of 7,500 Shell jobs and contractor roles it was already planning to remove because of the oil price collapse.
But now Shell, which is listed in the UK and the Netherlands, is increasing the number of jobs going after the BG takeover to 5,000.
At the end of last year, Shell had 90,000 employees, while BG had 4,600. Some investors have criticised the BG takeover, accusing Shell of overpaying for its smaller rival, particularly at a time of low oil prices.
Shell declined to say where the latest job losses would be focused, except that 475 were in the UK and 150 in Norway. The affected jobs in the UK were mainly in its exploration and production operations, but also involved back-office staff.
According to Paul Goodfellow, Shell’s Vice-President for UK & Ireland, said: “Despite the improvements that we have made to our business, current market conditions remain challenging.
“Our integration with BG provides an opportunity to accelerate our performance in this ‘lower for longer’ environment. We need to reduce our cost base, improve production efficiency and have an organisation that best fits our combined portfolio and business plans.”
Shell, like many of its rivals, is cutting costs as profits tumble because of the plunge in oil prices since mid-2014.
Last December, Royal Dutch Shell announced that its proposed merger with BG Group had received unconditional clearance from the Chinese Ministry of Commerce (MOFCOM), marking the final pre-conditional approval required for the deal.
Shell also confirmed it currently expects an overall potential reduction of approximately 2,800 roles globally across the combined group as a result of the merger, which translates to around 3 percent of the total combined group workforce.
