Shell to Reduce Global Workforce by 15%

Shell said at a Strategy Presentation that the company plans to reduce it global workforce by 15 - 20% or approximately 2,500 jobs worldwide. The staff reductions would be in the company's core oil and gas division and would take place over the next four years. Shell is aiming for costs savings of somewhere between $500 million - $800 million by 2006. Non-core asset sales in the North Sea and United States, and a global reorganization of the oil and gas division will be the main source of the performance improvements, Shell said.

"Shell retains a premier position in the upstream oil and gas industry," said Walter va de Vijver, managing director of the division. "Together these businesses are the growth engines for the group." These savings, along with $8 billion to $9 billion a year of investment in oil and gas and its gas and power division, would help deliver underlying earnings growth of 6 to 8 percent a year until 2006, a target the company has already communicated to analysts. The reorganization will eliminate jobs, especially where asset sales are targeted. About 2,500, or 15 percent of the company's 17,000 strong upstream workforce will go, but the impact on Shell's total 110,000 global workforce will be small, and spread over four years.