Shell plans to slash up to 9,000 jobs worldwide, Canadian impact unknown
Energy producer says it hopes to save up to $2.5 billion through reductions and cost-cutting
Energy producer Royal Dutch Shell said Wednesday it's planning to cut between 7,000 and 9,000 jobs worldwide by the end of 2022 following a collapse in demand for oil and a subsequent slide in prices during the coronavirus pandemic.
However, the implications for the company's Canadian operations or its 3,500 employees aren't yet known.
Shell said around 1,500 employees globally have already agreed to take voluntary redundancy this year and that it's looking at a raft of other areas where it can cut costs, such as travel, its use of contractors and virtual working.
Overall, it said it expects the cost-cutting measures to secure annual cost savings of between $2 billion and $2.5 billion by 2022.
"We have to be a simpler, more streamlined, more competitive organization that is more nimble and able to respond to customers," said Ben van Beurden, the company's chief executive.
"To be more nimble, we have to remove a certain amount of organizational complexity."
3,500 employees in Canada
The impact on Canadian employees or operations isn't yet clear.
The company is a player in a number of key areas of the sector, including Alberta's oilsands, natural gas development, and refining in Ontario. It's also spearheading construction of the massive LNG Canada export terminal on B.C.'s coast.
Of the 83,000 staff Shell employs worldwide, roughly 3,500 are in Canada.
"We do not have an exact figure for Canada because the details are still being worked out, and we have never had a target to reduce a particular number of jobs," Shell Canada spokesperson Tara Lemay said in an email.
Rory Johnston, managing director and market economist at Price Street in Toronto, said word the company could cut as many as 9,000 jobs worldwide is "devastating news" for people employed in the sector.
"The people that are employed in the sector more broadly already have a lot of anxiety about the ... employment situation in the sector — and this type of thing doesn't help," Johnston said.
Johnston wasn't surprised by the news, adding that "a lot of the writing has kind of been on the wall for a while now."
He said employment numbers at large companies have been under pressure. Speaking of Shell in particular, he said the company has been moving toward being more of a general "energy" company and not just oil and gas.
"Right now, more than half of Shell's business is tied to oil," Johnston said. "But the company's management has said that they're looking to transition over the next decade to at least being equal parts, oil, gas and renewables."
Shell also said that it expects third-quarter production to be between 2.15 million and 2.25 million barrels of oil equivalent a day, and that daily production levels have been impacted by between 60,000 and 70,000 barrels because of hurricanes in the Gulf of Mexico.
With files from CBC News' Tony Seskus and Meegan Read