SHELL: We’ll cut 10,000 jobs

Shell will cut 10,000 jobs in its merger with BG Group, and sell $30 billion worth of assets, to protect its profitability in an era of cheap oil.
The oil producer put out a fourth quarter and full-year update on Wednesday, warning of lean times ahead.

Here’s the key quote from the statement on job cuts (emphasis ours):

Synergies from the BG combination will be in addition to that. Together, these actions will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies, as streamlining and integration of the two companies continue.

And here’s what the oil company said on sell-offs:

Asset sales for 2014 and 2015 now exceed $20 billion, well above the original plan of $15 billion set out in early 2014. Preparations are well advanced for $30 billion of asset sales in 2016-18, assuming the successful completion of the combination.

The oil price is plunging and CEO Ben van Beaurden’s call of $60 oil in the medium term is looking less and less likely. The WTI benchmark dipped below $28 in trading on Tuesday.
Here’s that chart:

image: https://static-ssl.businessinsider.com/image/569f3514dd0895ab1f8b4763-1106-509/oil%20jan%2020.png

Plummeting oil prices are, understandably, having a huge impact on Shell’s business. The company warned in Wednesday’s update that fourth quarter profits are set to be around 40% lower than last year, between $1.6 billion and $1.9 billion. That’s despite a $4 billion reduction in spending in 2015, equivalent to 10% of capex.
But Van Beaurden was bullish on the company’s prospects beyond the BG merger, saying:

Bold, strategic moves shape our industry. The completion of the BG transaction, which we are expecting in a matter of weeks, will mark the start of a new chapter in Shell, to rejuvenate the company, and improve shareholder returns.

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