Oil giant Shell to cut jobs in Nigeria, others to save costs by $3 billion

Global oil company Shell is implementing workforce reductions across multiple divisions as part of its cost-cutting and competitiveness improvement efforts.

With CEO Wael Sawan at the helm, the UK-based oil and gas company aims to achieve a reduction in structural costs of up to $3 billion (£2.36 billion) by the conclusion of 2025.

Bloomberg reports that these job cuts are in addition to the previously disclosed redundancies in the company's low-carbon division.

The choice to implement job cuts comes despite the company experiencing a 4.5% increase in net profit, reaching $7 billion in the third quarter compared to the same period the previous year.

According to insiders, workers impacted by the workforce reductions are provided options, including redundancy packages or the opportunity to seek alternative positions within Shell.

Although the company's precise figure for the total job cuts remains undisclosed, this action aligns with Sawan's dedication to enhancing Shell's performance and narrowing the valuation disparity with U.S. counterparts like ExxonMobil and Chevron.

Shell conveyed in an email: “Achieving those reductions will require portfolio high grading, new efficiencies and a leaner overall organisation. While no formal targets exist, we will continuously look to right-size the activities that deliver the most value.”

Shell recently revealed its intentions to sustain oil production levels until 2030, sparking criticism from environmental advocates who also denounced a substantial payout to shareholders.

At the conclusion of 2022, Shell boasted a global workforce of approximately 93,000 employees. Despite Shell having a workforce more than twice the size of Chevron's, the latter holds a market value that is 34% higher.

The oil industry is navigating a period of uncertainty marked by apprehensions regarding the sustained demand for fossil fuels and heightened investor expectations for returns.

Consequently, there is an observable trend towards a more cautious expenditure approach among oil companies.

For instance, Chevron has articulated a need for enhanced performance in 2024 following the failure to meet certain key targets.