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Shell Job Cuts Torture

Peter Voser, left, CEO Royal Dutch Shell, chats with Ron Southern, chairman Atco Group, during Round Table Discussions at Spruce Meadows, Friday Sept. 11, 2009. Photograph by: Ted Jacob, Calgary Herald

By John Donovan (updated in collaboration with a Shell insider)

Shell CEO Peter Voser looks happy and relaxed in this photograph taken at a Calgary conference where he delivered the keynote speech on Friday, but then he is not faced with the prospect of re-applying for his job.

It is notable that his lengthy speech contained not a single word about Shell jobs cuts or the issue of making employees re-apply for their jobs – both subjects of high interest to Shell employees and the news media.

The sensitivity attached to the taboo subject was betrayed when he was pressed by reporters after the speech to discuss his restructuring plans and the number of employees likely to be culled.

According to Reuters, Voser said: “I will not talk about actual numbers of staff, (the) number of reductions, because quite clearly this is not about staff numbers.” He went on to say: “We will have less staff but we will discuss that internally.”

I assume this is a reference to the discussions with the Staff Council, which according to our sources, have run into difficulties (as mentioned in my recent email to Royal Dutch Shell Plc Company Secretary Michiel Brandjes). My email also referred to leak guidelines issued to Shell Public Affairs which included an instruction not to comment on leaks.

In this connection, I note that the Reuters report of the Voser speech said in a reference to

One website, citing internal sources has reported that Shell plans to chop 15 percent of the exploration and production unit’s staff but the company has declined to comment.

The first hint of cut backs came in a Reuters article “Shell gets tough on costs as oil prices bite” published on 30 January 2009. The article was focused on an email from Royal Dutch shell Executive Director Malcolm Brinded published on our website in which he warned that staff had to make “tough choices”. “We simply need much higher sustainable savings this year and I ask for real actions from all of you …. Shed contractor staff, challenge requirements, eliminate consultancy work, reduce travel massively, cut overheads everywhere.”

More Reuters articles followed, on 9 February – “Shell eyes Mideast growth, to cut some jobs” and on 12 February – “Shell to stall hires, and get “ruthless” on contractors“.

First news of the Voser restructuring of Shell – “Transition 2009” – revealing the prospect of significant job cuts, broke as a front page lead story in the FT newspaper on 27 May and was quickly followed by articles in many newspapers and on numerous news organisation websites, all mentioning the role of this website in publishing leaked Shell internal emails.

We later revealed that Shell staff were being required to reapply for their jobs. Voser described this tactic as “an interesting exercise because we could really select those we are keen on.”

Stories containing speculation about the job cuts have been flowing ever since with The Times reporting on 12 September that up to 10,000 jobs are expected to go.

It doesn’t amount to water-boarding, but is it fair to Shell employees to ignite and sustain uncertainty for several months over their continued employment and also hold over their heads the disturbing threat that some people will have to reapply for jobs? Is the unconscionable delay and and ruthless “exercise” compatible with the pledge of “respect for people” proclaimed in Shell General Business Principles?

Voser is aware of the time delay issue because on 5 September he was was quoted as saying in relation to the cuts, “We are moving quickly.” Unfortunately this is self-evidently not the case.

While I give Mr Voser credit for bringing some badly needed qualities of initiative and enthusiasm to the Chief Executive role along with the courage to tackle over-staffing resulting from empire building, things seem to have gone badly awry, causing unnecessarily prolonged concern and anxiety.

I also hope lessons were learned from the last restructuring – the so called “transformation” over a decade ago, when too many staff with invaluable specialist experience were culled.  This led to a damaging shortage of skilled staff when the market improved.

This shortage of technical know-how could be alleviated by employing large numbers of redundant staff in various projects. Some redundant staff (who left with handsome severance payment) were even re-employed on a pensionable basis, this despite the explicit order of on-high to never re-employ redundant staff. The HR systems and people, who once used to be the envy of the oilpatch, were ruined by Hofmeister and his lackeys and simply could not handle all this.

But Hofmeister and his sycophants did a good job looking after themselves: Shell is now run by Finance and HR people and supported by an army of overpaid lawyers. All talk of technical excellence are hollow words. And since the last 10 years or so, the moment Shell started to talk a lot about a certain topic, the less this topic was executed or implemented. In the late 80s, there was genuine diversity but Shell never talked about it, they just did it. So, one has to be a Kremlin watcher to understand what Shell is really doing rather than saying!

The most appalling action of late was the extra bonus to Jeroen van der Veer for ‘nearly’ making his targets. The nice boy had tried hard so was rewarded. All at the same time when Voser is telling the world that he took over a company that had made a dog’s breakfast of its organisation. Too much overhead, too little profit, no new projects, reserves and production going down and therefore massive culling of staff. It probably would take an English politician to explain in a coherent stream of words that the bonus of  Jeroen van der Veer was well deserved and exactly right. But the rest of the world sees very clearly what a mess Shell is in right now, and listening to the staff, the company appears to be on the final downturn.

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