The Anglo-Dutch company said Wednesday it will cut between 7,000 and 9,000 jobs by the end of 2022, which could affect more than 10% of its workforce. The total includes 1,500 people who volunteered to leave the company this year.
“We have to be a simpler, more streamlined, more competitive, smarter and more responsive organization,” Chief Executive Ben van Borden said in a statement. “Make no mistake: This is a very difficult process. It is very painful to know that you will say goodbye to quite a few good people.”
Shell has committed to achieving net zero carbon emissions from its operations by 2050. Van Berden said on Wednesday that the company will continue to produce some oil and gas by that date, but it “mostly” will sell low-carbon electricity, low-carbon biofuels and hydrogen.
“We should have a net zero in all of our operations, which means major changes to refineries, chemical sites, and onshore and offshore production facilities. But it also means we have to change the type of products we sell,” Van Bearden added.
In the future, the company will use its oil exploration and production business to generate liquidity that can be invested in low carbon products. The division will no longer focus on the number of barrels of oil or cubic feet of gas it produces.
Shell will also reduce its refining business. “We will keep only what is strategically necessary for us and integrate these refineries with our chemical business, which we plan to grow,” Van Bearden said.
Some analysts believe that global oil demand may never return to its record high for 2019, and instead expect the pandemic to permanently reshape the way people live and travel – and for consumers to push companies and governments to tackle the climate crisis with more urgency.