Royal Dutch Shell Plc. drastically scaled back its profit forecast for the fourth quarter and said Wednesday that it would continue to downsize staff in 2016, highlighting the extent of damage caused by the rout in crude oil prices. Shell is the first of the world's oil giants to release an earnings outlook for the past quarter.

The company said it expected fourth-quarter profit, excluding one-time costs, in the range of $1.6 billion to $1.9 billion — about 50 percent lower than a year back. Analysts polled by Bloomberg had projected Shell’s fourth-quarter earnings closer to $1.8 billion. Shell also expects one-off losses and other writedowns to cost the company about 7 billion pounds (about $10 billion) in 2015.

“Oil companies have been cutting spending a lot, trying to react to the lower oil prices,” Jason Gammel, a London-based analyst with Jefferies International Ltd., told Bloomberg. “But the slump has been so steep that they haven’t been able to keep up.”

Shell, which is buying BG Group Plc., has come under pressure from investors to justify its 35 billion pound ($50 billion) takeover as crude oil prices have continued to drop.

Oil prices tracked lower Wednesday after U.S. government data reportedly showed crude stockpiles in the country expanded in the last week. On Tuesday, a report from the International Energy Agency suggested markets could “drown in oversupply,” helping push prices Wednesday to as low as $27.32 per barrel before recovering to $27.76 as of 5.45 a.m. EST, Reuters reported.

The 18-month-long slump in oil prices has sent energy companies reeling, and erased more than $2.7 trillion of oil companies’ market value, according to Bloomberg.  

Shell, which has already cut thousands of jobs and reduced spending, announced it would continue to reduce staff size  — by about 10,000 after its merger with BG Group — and cut costs of the combined company by about $3 billion in 2016. The company is also backing off from investing in high-cost projects such as drilling in the Alaska and developing a gas field in Abu Dhabi. 

In a separate announcement, BG said it would be reporting 2015 profits of $2.3 billion, a significant bounceback after losses in the previous year.

Shell’s shares sank 6 percent during morning trade on the London Stock Exchange Wednesday.