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Massive shake-up at Shell puts 24,000 jobs at risk

The Independent

Up to a third of senior management under threat

By Sarah Arnott

Thursday, 28 May 2009

Hot on the heels of the surprise resignation of top executive Linda Cook, Shell’s in-coming chief executive Peter Voser announced major restructuring plans yesterday that could cut thousands of rank-and-file jobs.

Some 24,000 staff at the Anglo-Dutch oil giant will be affected by the changes, with job losses expected to be in the thousands. Up to a third of senior management are believed to be under threat.

There are three major structural changes. The company’s three upstream businesses – exploration and production (EP), gas and power (GP) and oil sands – will be combined into two, new regional units: Upstream Americas and Upstream International. Mr Voser is also creating an entirely new “Projects & Technology” division which will manage everything from R&D to project delivery to contracting and procurement. Finally, some parts of Shell corporate are to be absorbed into specific business units, while the rest is streamlined under a single combined human resources (HR) corporate director role.

The measures are intended to simplify the structure of the company, speed up implementation and cut costs. Mr Voser – who takes over from out-going chief executive Jeroen van der Veer at the start of July – said: “This new structure will increase accountability in the company, and improve Shell’s performance on delivering new projects and developing new technologies. These changes will increase our focus, accelerate our plans to reduce complexity, corporate overheads and costs, and result in faster decision-making and delivery.”

At the top level, the changes mean a significant re-balancing of Shell’s eight-strong executive committee. The company says the new structure allows greater representation from business units and less for internal functions.

The new regime appears to confirm rumours that the resignation of Ms Cook, who was head of the gas and power group, stemmed from differences with Mr Voser. With Ms Cook gone, there is space for the head of the new Projects & Technology unit, Matthias Bichsel, currently at Shell’s EP technology division. He will be joined by Marvin Odum – now executive vice-president of Americas EP business – as the new director of the Upstream Americas business. Malcolm Brinded, the executive director of EP, will take on the Upstream International job.

The changes at Shell HQ will claim the scalp of Ms Cook’s only other female colleague on the executive committee. Under the new structure, the committee will have only three members from Shell headquarters – from finance, legal, and the newly combined human resources and corporate director – as opposed to four. The HR and corporate role will go to the current HR director Hugh Mitchell, while Roxanne Decyk, current head of corporate affairs, will stand down from the committee to take a role leading a new government relations department in Washington, DC.

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