Shell cuts 900 jobs in the Netherlands

Shell scraps some 900 jobs in the Netherlands as a result of the reorganisation in which some 7000 to 9000 jobs worldwide will disappear. The combination of the oil crisis and the coronacrisis led to a halving of the stock market price in the last year and forced the multinational to write off more than 20 billion dollars on oil and gas reserves.

Not everyone at the company will immediately know where he or she stands. Shell is going to cut in the number of positions and people can apply for the remaining positions in the company. According to board chairman Ben van Beurden, there are too many levels of board between him and the technicians in the workplace.

The austerity operation should reduce the cost of the company by about $2.5 billion a year. The number of Shell refineries is reduced worldwide from fourteen to six. The refinery in Pernis remains, just like the chemical branch in Moerdijk. In the Netherlands, the redundancies therefore seem to be mainly about functions at the offices in The Hague, Rijswijk and Amsterdam.

Shell says that the number of jobs in the Netherlands will decrease by 10 percent. โ€œA good social plan is available and Shell guides affected employees from work to work as much as possible. Because the exact numbers are not yet known, we cannot say more at the moment,โ€ says a Shell spokesman about the redundancies. However, the spokesman can say that this is not about people at Shells pumping stations.

Topman Van Beurden mentioned earlier that the peak of the oil age is over. Shell also outlines an energy future that will consist mainly of electricity in thirty years. The company has announced that it will well double its investments in the renewable energy business area. This announcement led to scepticism among critics, because in addition to marine wind farms, matters such as marketing are covered by this business.

Environmental organisations and critical shareholders also demand more concrete plans for the reduction of oil and gas activities and clearer targets for investments in solar and wind energy. Next month, Shell will come up with a new strategy for the coming years.

Disappointed managers

The International Energy Agency (IEA) expects the demand for oil and gas to recover in the coming years. The demand for oil will drop rapidly after 2030, and for gas it will take longer, according to the IEA. Shell will invest more in renewable energy with a limited amount of capital in the coming years, but the vast majority of investments will continue to go to oil and gas.

According to the Financial Times, the announced new strategy already led to the departure of a number of disappointed managers from Shell who were involved in green energy projects. According to Shell, their departure is mainly due to the announced reorganization and the combination of different functions.

Coffee and sandwiches

The Royal Dutch Shell group consists roughly of two parts. One component mainly pumps up oil and gas what is called โ€œupstreamโ€ in energy jargon. The other part makes products and sells them, which is called โ€œdownstreamโ€. Now that the oil and gas pump department is in serious trouble, Shell is trying to reassure shareholders about the companys ability to sell products.

Shells 45,000 petrol stations sell not only petrol and diesel, but also numerous other products. Thats a growth market, the company thinks. For example, Shell has more locations worldwide where they sell coffee and sandwiches than Starbucks and McDonalds. As the number of electric cars increases, people stay at the filling stations even longer, and sales of such products increase, is the companys reasoning.

The stock market price of Shell has now gone up a bit, but still not back to the old level.