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More job losses expected in Shell restructuring

Shell job lossesShell is making significant staff reductions in a bid to cut costs and finance new development. Photograph: Toby Melville/Reuters

Pressure to cut costs and finance new projects could lead to a 10% workforce reduction by the end of the year

By Tim Webb

Friday 4 September 2009 19.30 BST

Shell will announce the next stage of its global restructuring on Monday, which will result in thousands more job losses.

The Anglo-Dutch oil company is targeting middle-ranking managers at its exploration and production unit, which could result in up to 15% of posts being lost.

Peter Voser, Shell’s new chief executive, was reported to have posted a statement on the company’s intranet admitting that “ongoing changes will result in significant staff reductions”. It was also reported that an internal email was sent to middle managers informing them that “the coming days will bring more information about Shell’s reorganisation”. Shell declined to comment.

The cuts are part of a programme dubbed “Transition 2009”. In July, the company announced it had told 740 of its most senior managers to reapply for 600 posts. The next stage of the programme, which will be detailed on Monday, will affect more junior managers. Analysts say that once the programme is completed by the end of the year, 10% of Shell’s 102,500 global workforce could be axed. The company employs 8,500 workers in the UK.

As part of the restructuring, Shell will merge three divisions into two, meaning workers in restructured divisions who have overlapping functions face losing their jobs. Shell is under pressure to cut costs to finance divisions such as oil sands and liquefied natural gas.

The headquarters for its global downstream operations – which covers non-exploration activities – will remain in London. This division is to include trading and alternative energy, such as biofuels, which are core areas for the company, so it is unlikely that many jobs in London will go. Job cuts could be heaviest at Shell’s head office in The Hague.

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