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Royal Dutch Shell restructuring to affect 24,000 jobs

Daily Telegraph

Royal Dutch Shell has unveiled the most the radical restructuring of its operations for decades in a move that will impact over 24,000 jobs. 

Peter Voser, the energy giant’s in-coming chief executive, told a meeting of 200 of Shell’s top managers in Berlin, that a sweeping re-organisation was needed.

In a hard-hitting email to all staff yesterday morning and seen by The Daily Telegraph, Mr Voser said: “Our behaviours need to change if we want to enable leadership performance in a strong performance culture. That will mean that fewer people will make strategic decisions. More people will implement them, and improving performance will be our guide and goal. We will become a simpler place to work. These are key changes, aiming to make our company fitter for the future.”

The changes, which will be effective from July 1, when Mr Voser succeeds Jeroen van der Veer, will also bring a new strategic focus on to Shell’s American operations to answer President Obama’s demands for more domestic energy production.

Shell’s three main business units – Exploration Production, Oil Sands and Gas & Power which employ 22,000 people – will be merged into two: Upstream Americas covering North and South America, and Upstream International covering the rest of the world. Shell’s windpower business will be part of the upstream portfolio.

The “down-stream” divisions, which consist of the refining, marketing and chemicals businesses, will be expanded to include Trading and Alternative Energy units, except for wind. A new, group-wide business called Projects and Technology, has been created which will be responsible for project execution across the group. Matthias Bichsel, a Shell veteran, will join the executive committee as boss of the new division.

Shell’s headquarters, which employs 2,000 people, will also be restructured. Marvin Odum, currently boss of Shell in the US, joins the executive committee has been appointed head of Upstream Americas. His current boss Malcolm Brinded, who is head of E&P, will be in charge of Upstream International, which will include most of the current Gas & Power business run by Linda Cook, who announced her decision to step down on Tuesday.

The overhaul, which echos BP’s restructuring when Tony Hayward took over two years ago, was described by analysts as a “step in the right direction” after years of investor frustration with Shell’s old-fashioned, rigid organisation that has been blamed for project delays and loose cost controls. 

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