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Report claims many Shell staff will have to reapply for their posts

Press & Journal

Saturday 5 September 2009

Oil giant planning job cuts of 15%

Report claims many Shell staff will have to reapply for their posts

By David Telfer

Published: 05/09/2009

Royal Dutch Shell is planning job cuts of about 15% in its core exploration and production business, according to a report released yesterday.

The document, which cited sources inside the oil major, also said an announcement on a restructuring of the business is due on Monday, September 14, and that many staff would be forced to re-apply for their jobs.

The Press and Journal reported in July that Shell’s new chief executive, Peter Voser, was planning “substantial” cuts in the group’s worldwide workforce of 102,000, although he refused to give numbers.

Shell employs about 2,000 people in Aberdeen, but it is unclear at this stage how many may go.

Mr Voser did say, however, that “ongoing changes will result in significant staff reductions”.

The group said in July it had already cut 20% of its top management positions from 750 to 600.

The shake-up is expected to involve the merger of three upstream units into two new divisions – Upstream International and Upstream Americas.

Like most majors, Shell is facing a steep drop in profits after oil prices fell from a peak of £90 a barrel in July 2008 to about £43 a barrel now. For the second quarter of this year, net profits at Shell fell 66.9% on a year earlier to £2.36billion.

The restructuring is understood to be aimed at cutting layers of management, in line with similar efforts at BP two years ago and emulating ExxonMobil’s model. It is thought simplifying the structure could speed up decision-making and ensure projects come on stream faster.

That is understood to be a key objective for a company which has been heavily criticised for delays and cost over-runs at some of its most high-profile projects.

A Shell spokeswoman last night said: “We are working through the design of the rest of the organisation below senior management levels and undertaking staff consultation processes.

“Ultimately a more efficient company and operations will be able to sustain higher levels of performance in the North Sea than would otherwise be the case.

“Until our work on the organisational design and consultation is complete, there are no firm details on numbers within Europe or Aberdeen.”

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