FTSE-listed oil major Shell will cut 9,000 jobs, close to 10 per cent of its total workforce.
Only 1,500 of those job cuts are through employees taking voluntary redundancy.
Shell, which had 83,000 employees at the end of 2019, said the job cuts will save it as much as $2.5bn (£1.95bn) per year by 2022.
In August Shell launched a broad review of its business aimed at deeply cutting costs as it prepares to restructure its operations as part of a shift to low-carbon energy.
Today chief exec Ben van Beurden reiterated Shell’s intent to be a net zero emissions company by 2050.
To do so, the company will change the type of products it sells, he said.
“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.”
The Anglo-Dutch company said it expected to cut 7,000 to 9,000 jobs by the end of 2022.
In an operations update to the London Stock Exchange, Shell also said its oil and gas production was set to drop sharply in the third quarter to around 3,050 barrels per day.
That’s due due to lower output as a result of the coronavirus pandemic and hurricanes that forced offshore platforms to shut down.
It’s been a bad year for the oil major: it cut its dividend for the first time since World War Two, racked up nearly $17bn in impairment charges in the second quarter and has now said it’ll have another $1bn in write-off in the third quarter.
As a result of the pandemic, Shell saw a 46 per cent fall in first-quarter net income to $2.9bn, while second-quarter income fell 82 per cent to $638m.
In an interview, van Beurden said that the it would be “extremely tough” to make the cuts.
“It is very painful to know that you will end up saying goodbye to quite a few good people. But we are doing this because we have to, because it is the right thing to do for the future of the company.
“We have to be a simpler, more streamlined, more competitive organisation that is more nimble and able to respond to customers”, he added.
Russ Mould, investment director at AJ Bell, said: “The big job cuts are understandable and are likely to receive a broadly positive response from the market.
“A more efficient, more streamlined operation could result in more profit which it can share with investors and potentially invest in reshaping the business.
“However, while some roles might have been rendered irrelevant by the transition away from fossil fuels, Shell will lose good people.
“This could undermine its recovery coming out of the pandemic and also hamper its attempts to head towards a greener future.”
Earlier this year Shell’s chief rival BP also announced a sweeping restructuring plan which will see it cut 10,000 of its 70,000 roles.
Shares in the firm rose 1.6 per cent as markets opened.