Shell’s new chief executive is poised to cut hundreds of jobs from the oil giant’s low-carbon division as part a plan to boost the company’s profits.
Wael Sawan plans to shrink the number of staff working on low-carbon solutions by around 200 next year, after vowing to shift Shell’s focus towards high-profit oil projects and expanding its gas business when he became chief executive in January.
Shell managers reportedly told staff in the division last week that they will also consider culling a further 130 roles from the business unit, which in total would represent a 25% cut from the low carbon solutions team.
Some of the employees will be reassigned to other parts of the company, which employs a total of 90,000 people in 70 countries.
The low-carbon team is focused on the transport and heavy industry sectors, but it does not include staff working within Shell’s renewable power business.
The job cuts are expected to target those developing solutions for hydrogen-powered light vehicles. Shell was an early adopter of the technology, which has fallen from favour as the popularity of electric vehicles has grown.
The division also includes carbon capture and storage and nature-based businesses, which will not be affected by the current round of cuts, according to sources cited by Reuters, which first reported the redundancies. The company said it remains committed to investing in “viable low-carbon business models”.
Sawan has promised to grow Shell’s gas business despite warnings from climate experts that new oil and gas projects are not compatible with the global goal of limiting global heating to within 2C of pre-industrialised levels.
The plans provoked outrage from climate campaigners and Shell’s own employees after two members of staff wrote a rare open letter urging Sawan not to scale back investments in renewable energy.
A spokesperson for Shell said the cuts were part of the company’s drive to “create more value with less emissions” by focusing on “performance, discipline, and simplification” across the company.
“We are transforming our low-carbon solutions business to strengthen its delivery on our core low-carbon business areas such as transport and industry. In line with these principles, we are simplifying the business structure and reducing the head count,” the spokesperson added.