As crude oil prices stay below $50 a barrel, having climbed almost 75 percent from their lows of below $28 a barrel in January, some of the world’s largest oil and gas companies continue to feel the pinch. Many companies used layoffs to cut costs, and Anglo-Dutch giant Royal Dutch Shell announced Wednesday it would cut 2,200 jobs in what it called “a ‘lower for longer’ price environment.”
The latest cuts come on top of more than 10,000 jobs that Shell has already reduced since the beginning of 2015, taking the total to about 12,500. The company also reportedly said its acquisition of BG Group, an erstwhile smaller rival, for $54 billion earlier this year was a factor contributing to the latest job cuts.
Paul Goodfellow, vice president for Shell U.K. and 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 organization that best fits our combined portfolio and business plans.”
The current round of job cuts will affect operations in the North Sea off the Scotland coast, the Aberdeen headquarters of the company, as well as its Ireland office. At least 5,000 of all announced job cuts will take place this year.
Shell shares were trading 0.76 percent higher on the London Stock Exchange and 1.12 percent up in Amsterdam at 8 a.m. EDT.