Shell is slashing its workforce months after cutting its dividend. Here's everything we know about the oil giant's dramatic overhaul — including which roles might be at risk.

  • Shell on Wednesday said it expects to cut up to 9,000 jobs, more than 10% of its workforce. 
  • The cuts are part of a broader reorganization known as Project Reshape that seeks to transform the European major into an energy business that produces fewer greenhouse-gas emissions. 
  • Shell will dramatically reduce the number of refineries it operates while focusing on lower-carbon energy sources like biofuel, hydrogen, and wind power. The company will still produce some oil in 2050. 
  • Do you have information about Shell's job cuts? Reach out to this reporter at [email protected] or through Signal at 646-768-1657. 
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European oil giant Royal Dutch Shell expects to cut up to 9,000 jobs, or more than 10% of its workforce, as it seeks to transform into a more sustainable energy producer, the company said Wednesday. 

That transformation — known internally as Project Reshape, according to Reuters — will result in a number of other dramatic changes to Shell, the third-largest oil company in the West.

Shell plans to shrink the number of refineries it operates to fewer than 10, down from 55 a decade and a half ago. Based in The Hague, Netherlands, the company will also focus on producing more clean energy from sources like wind and solar while investing in biofuels and hydrogen gas. 

In April, Shell committed to becoming a net-zero emissions company by 2050, meaning it will produce no more greenhouse gas emissions than it captures. 

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"We will have some oil and gas in the mix of energy we sell by 2050, but it will be predominantly low-carbon electricity, low-carbon biofuels, it will be hydrogen and it will be all sorts of other solutions too," Ben van Beurden, Shell's CEO, said in an interview published on the firm's website Wednesday. 

Project Reshape is also about cutting costs. The price of oil — a major determinant of profit for Shell — crashed this spring as the coronavirus sapped demand for oil-based fuels like gasoline. 

Five months ago, Shell cut its dividend for the first time since World War II. Other major energy companies including BP and Equinor have also axed their dividends this year to cut costs.

Shell has a workforce of 86,000 and a market value of about $97 billion.

Do you have information about job cuts at Shell? Reach out to this reporter at [email protected] or through Signal at 646-768-1657. 

Ben van Beurden, Chief Executive Officer of Royal Dutch ShellReuters

'We have too many layers in the company'

Shell said job cuts will range from 7,000 to 9,000 workers by the end of 2022, and that number includes about 1,500 workers who volunteered to leave the company this year. 

The company didn't specify which roles would be cut, but van Beurden hinted that mid-level workers are at risk. 

"In many places, we have too many layers in the company: too many levels between me, as the CEO, and the operators and technicians at our locations," he said. "We have also found that there are many people in the middle of our organization who have a relatively small number of people reporting to them." 

"In some cases there are good reasons for that," he added. "But as a principle we are looking to remove that complexity, and cost," he said. 

Read More: Shell's new clean-energy boss is forging a fresh future for the $100 billion giant as the oil business begins to unravel

More jobs could be cut as Shell divests from the fossil-fuel business

The job cuts Shell announced, which could amount to more than 10% of the company, do not take into account job reductions tied to the firm's divestments, account to van Beurden. 

And there are likely to be many of them. 

As Shell plods ahead towards 2050 — when it's set to become a net-zero emissions company — the firm will shrink its refinery arm, van Beurden said.

Shell is also looking to reduce spending on oil and gas production by 30% to 40%, according to Reuters. The firm will narrow its production to a few key hubs including the Gulf of Mexico, Nigeria and the North Sea, per Reuters.

However, Shell will still sell "some" oil and gas by 2050, van Beurden said. 

"Upstream will be critical to Shell as we change — we need it to be very successful, so we have the financial strength to invest further in our lower-carbon products," he said. 

Shell is among the largest backers of hydrogen technologyMiquel Gonzalez/Shell

Wind, biofuels, and hydrogen

Meanwhile, Shell will ramp up its investments in lower-carbon energy sources like biofuels and offshore wind power. The company already backs a venture that's among the world's largest sugarcane ethanol producers, and it's also one of the most active investors in hydrogen-based fuels. 

Yet big challenges lie ahead. About 85% of the company's carbon footprint comes from its customers using Shell products like fuel, van Beurden said. Stamping out or capturing those emissions will force Shell to adopt a far-less-familiar business model. 

Read more: The hydrogen economy is set to explode into a $2.5 trillion industry. Bank of America lays out the winners and losers as the gas reaches a 'tipping point.'

"That mission does mean dramatic change for Shell," van Beurden said. 

The company will also have to convince investors that it can still churn out profits. Just days after BP announced similar plans to become a lower-emissions energy producer, the company's market value fell to a 25-year low. 

Do you have information about job cuts at Shell? Reach out to this reporter at [email protected] or through Signal at 646-768-1657. 

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