Lay-Offs on the Cards for Royal Dutch Shell
The oil giant has been going through a rough patch with the price of oil falling steadily over the recent past. To counter this unfortunate trend, Royal Dutch Shell has now announced that lay- offs are a part of the plan to help the company retain its footing in the global fuels marketplace. The company has faced significant falls in its profit margin as is evident by its recent financial results announcements. The earnings of $1 billion in Q2 are in sharp contrast with the $4.7 billion that it registered from the same period a year ago. However, the plan to acquire the British BG Group is still on track, company sources say, dissipating rumors to the contrary owing to the financial crunch.
About 6500 jobs have been cut by Royal Dutch Shell in its move to combat the dipping oil price. These cuts have affected the contractors of the company as well as those employed directly by Shell. According to sources from within the company, these cuts are part of the $4 billion reductions that has been achieved in operating costs. The oil company employs slightly less than a 100,000 individuals as of now.
It is not just job cuts that have been brought about to take the pressure off the company’s bottom line. Oil exploration activities have also borne the brunt of the cutback measures. Planning for an extended downturn, Shell seems to be toeing a cautious line that will support recovery once price returns to normal levels. The key is to ensure that the company remains resilient, so that it can come through this period of subdued prices reasonably unscathed, says Chief Executive van Beurden.