Royal Dutch Shell has confirmed it is cutting 10,000 jobs amid its steepest fall in annual profits for 13 years.
It
made $1.8bn (£1.23bn) for the fourth quarter of the year, compared with
a $4.2bn profit for the same period the year before. Full-year 2015
earnings were $3.8bn, compared with $19bn in 2014.
The oil firm indicated it would report a massive drop in profits two
weeks ago and said it would cut 10,000 jobs, partly thanks to its
takeover of BG.
Royal Dutch Shell’s chief executive, Ben van
Beurden, said: “The completion of the BG transaction, which we are
expecting in a matter of weeks, marks the start of a new chapter in
Shell, rejuvenating the company and improving shareholder returns.
“We
are making substantial changes in the company… as we refocus Shell, and
respond to lower oil prices. As we have previously indicated, this will
include a reduction of some 10,000 staff and direct contractor
positions in 2015-16 across both companies.”
He added he would
take further action if necessary: “Shell will take further impactful
decisions to manage through the oil price downturn, should conditions
warrant that.”
At
the time of the proposed BG tie-up, oil was trading at about $55 a
barrel, but has fallen sharply since then and is currently trading at
about $30 a barrel, leading some shareholders to oppose the plan.
Standard Life, a key investor in Royal Dutch Shell, said last month
that the price of oil needed to be $60 a barrel for the takeover to make
financial sense, but last month, the majority of shareholders in Shell,
which is Europe’s largest oil company, voted in favour of that deal.
Shell
said it had cut operating costs over the year by $4bn, or around 10%,
and expected to cut costs by a further $3bn this year.
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