Shell slashes staff as profit disappoints

OIL GIANT Royal Dutch Shell said yesterday it was cutting 5,000 jobs in a massive cost-cutting drive, as it reported disappointing profits and a gloomy outlook for 2010.<br /><br />Pre-tax profits slumped 73 per cent to $4.6bn (&pound;2.8bn) for the third quarter. Shell said staff in its upstream arm would have to reapply for 15,000 new positions in its &ldquo;Transition 2009&rdquo; restructuring programme. <br /><br />Shell employs 50,000 people worldwide, and a fifth of its senior managers will leave as part of the restructuring. Half of the job cuts will be the UK, US and the Netherlands.<br /><br />The Anglo-Dutch group has been struggling as oil, gas and liquefied natural gas (LNG) prices tumble worldwide. &ldquo;We are not expecting a quick recovery,&rdquo; said chief executive Peter Voser. Shell&rsquo;s poor performance was exaggerated by rival BP smashing expectations in its third quarter profits earlier this week. <br /><br />Both groups have been struggling to deal with fluctuating oil prices throughout the recession &ndash; crude prices peaked at $147 a barrel in July 2008, before slumping to less than $40 in January. It is now averaging out at around $70 &ndash; but BP was much more effective in cutting costs and implementing change. <br /><br />The company said oil and gas production for the three months to September was 2.9m barrels of oil equivalent per day, similar to the same quarter last year.