Royal Dutch Shell said today that it will cut an additional 2,200 jobs due to low oil prices and in the wake of its £35bn takeover of BG Group.
This takes the total job cuts resulting from the integration of its smaller rival to at least 5,000 globally, including 475 job losses in the UK. Shell recently reduced its 2016 spending plans by another 10 per cent from the previous target due to the deal.
It comes atop of the 7,500 jobs axed last year after oil prices more than halved from over $110 per barrel in the middle of 2014.
The firm's shares rose as much as 0.9 per cent to 1,676.4p per share this morning.
Paul Goodfellow, Shell’s vice president for the UK and Ireland, said: "Despite the improvements that we have made to our business, current market conditions remain challenging."
"Our integration with BG provides an opportunity to accelerate our performance in this ‘lower for longer’ environment."
"We need to reduce our cost base, improve production efficiency and have an organisation that best fits our combined portfolio and business plans," he added.
Shell shareholders yesterday approved its remuneration report, however those opposing rose from 3.8 per cent last year to 14.2 per cent. Investor ire was stirred over multi-million euro pay packages for Shell's top execs, despite its sliding profits.
Oil companies around the world are cutting costs, scaling back or abandoning exploration projects and axeing jobs in response to low crude prices. This comes despite Brent rising from multi-year lows of below $28 per barrel in January to trade at around $50 today.
Shell intends to dispose $30bn (£20.5bn) worth of assets by the end of 2018, primarily in its downstream sector which refines, markets and distributes oil products.
It also expects annual operating expenses to fall to $40bn this year, despite the BG acquisition, from $53bn in 2014.