Royal Dutch Shell announced that it would eliminate another 2,200 positions, which means that its total job losses is roughly equivalent to the entire payroll of the tech giant Facebook.
By the end of 2016, Shell will have slashed 12,500 positions, a staggering total for one company. According to Statista, Facebook only employed 12,691 people as of 2015.
Much of Shell’s attrition is due to the collapse of oil prices, which has plunged the Anglo-Dutch oil major into a cash flow crisis. However, other job losses are due to its purchase of BG Group – synergies between the two companies will lead to the loss of around 2,800 positions, the company previously said. The combined Shell-BG company employed 94,600 people at the start of the year.
Shell and Facebook are a study in contrasts. The market cap of the tech giant ($343 billion) is 1.7 times higher than Shell’s $200 billion, but Facebook employs less than 15 percent of the people. Related: BP Faces Setback In World’s Largest Unexplored Oil Basin
Shell said that 475 of the 2,200 job losses will take place in the UK and Ireland, where it produces oil in the North Sea. “These are tough times for our industry,” Paul Goodfellow, Shell’s VP in the UK and Ireland, said in a statement. “We have to take further difficult decisions to ensure Shell remains competitive through the current prolonged downturn.” All told, the company expects to eliminate a total of 5,000 jobs this year.
Shell’s debt levels have jumped because of low oil prices and the BG purchase, taking its debt to equity ratio from 14 to 26 percent, a worrying climb. Investors have pressed the company to slash spending below $30 billion, and the oil major has pledged to dispose of $30 billion in assets to raise cash.
By Charles Kennedy of Oilprice.com
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