Internal Communications

Royal Dutch Shell is to cut at least another 2,200 jobs, with around 475 of those coming from its UK and Ireland oil and gas production business.

The cuts are mainly due to Shell’s takeover of oil and gas exploration firm BG Group and prolonged low oil prices, it said. Shell has announced more than 10,000 job losses over the past two years.

In February, the firm posted its steepest fall in annual earnings for 13 years.

“Despite the improvements that we have made to our business, current market conditions remain challenging,” said Shell UK and Ireland vice president Paul Goodfellow.

“Our integration with BG provides an opportunity to accelerate our performance in this ‘lower for longer’ environment.

“We need to reduce our cost base, improve production efficiency and have an organisation that best fits our combined portfolio and business plans.”

Most of the 475 UK job losses will be from Shell’s headquarters in Aberdeen. Some posts offshore and at the energy company’s plant at Mossmorran in Fife will also be affected.

The latest lay-offs will be implemented by the end of this year. That will take the total number of staff and contractor roles lost from Shell from the start of 2015 to the end of 2016 to at least 12,500.

At the end of 2015, Shell employed around 90,000 people globally and BG employed around 4,600.

Shell announced 7,500 job losses last year, and a further 2,800 job cuts at the beginning of this year.

The firm reported a sharp fall in full-year earnings in February, from $19bn in 2014 to $3.8bn last year.

Oil companies and their suppliers have cut back on investment and jobs as falling oil prices dent profits and make investment less worthwhile.

Brent crude prices have more than halved since mid-2014, dropping from more than $110 per barrel to below $50 per barrel. At the beginning of the year, prices were well below $40 per barrel.

In April, Shell announced planned office closures in Reading, Aberdeen and Manchester following the BG Group takeover, and said it planned to close the Thames Valley Park campus by the end of the year.

It said that all Aberdeen-based onshore operations would move to Tullos, and that BG’s offices at Albyn Place would close along with Shell’s Brabazon House office in Manchester.

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