Shell, the global oil conglomerate, is on the brink of implementing a significant reduction in its workforce, specifically targeting the low-carbon division. This move, orchestrated by the company’s new chief executive, Wael Sawan, aims to bolster Shell’s profits.
Sawan’s strategy involves reducing the staff count in the low-carbon solutions sector by approximately 200 in the upcoming year. This decision aligns with his commitment, declared upon assuming the role of CEO in January, to pivot Shell’s attention towards high-profit oil ventures and the augmentation of its gas operations.
Internal communications within Shell last week indicated that, in addition to the aforementioned cuts, there might be considerations to eliminate an extra 130 positions from the business unit. If executed, this would translate to a 25% reduction in the low-carbon solutions team.
While some affected employees might find roles in other segments of the company, the primary focus of the low-carbon team, which encompasses transport and heavy industry sectors, will undergo a transformation. Notably, this team does not comprise members from Shell’s renewable power business.
The anticipated job reductions are likely to impact those involved in the development of hydrogen-powered light vehicle solutions. Despite Shell’s early adoption of this technology, its appeal has waned with the rising popularity of electric vehicles. However, areas within the division, such as carbon capture, storage, and nature-based businesses, are expected to remain unaffected by these cuts.
Sawan’s vision for expanding Shell’s gas operations has been met with skepticism, especially given the global emphasis on curbing temperature rises to within 2°C of pre-industrial levels. This strategy has not only drawn criticism from environmental activists but also from within Shell’s ranks. Two employees penned an open letter, a rare move, urging Sawan to maintain investments in renewable energy sources.
In response to these developments, a Shell representative stated that the job cuts align with the company’s objective to “create more value with less emissions.” The focus will be on “performance, discipline, and simplification” throughout the organization. The spokesperson further elaborated, “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.”