What’s Going On Here?Investors were probably left a bit stunned as oil giant Shell announced up to 9,000 job cuts over the next couple of years. What Does This Mean?Shell had 83,000 workers at the end of last year, but it’ll have 7,000-9,000 fewer by the end of 2022. It’s all part of a restructuring that should, the company hopes, create a more streamlined business, save $2.5 billion in costs, and set it up for a lower-carbon future. The shift’s been ongoing, but it’s been accelerated by the pandemic.
Speaking of a lower-carbon future, Shell’s said it aims to become a net-zero emissions company by 2050. That’s the same target as its European rival BP, which announced 10,000 job cuts of its own in June. Maybe an unavoidable consequence of oil companies going green, then, is making their employees feel a little blue… Why Should I Care?For markets: Slip ‘n’ slide.
It’s no secret that oil companies are struggling, with both BP and Shell trying to save cash by cutting their dividend payments. And while US oil giants Exxon and Chevron have kept their payouts intact for now, that might not last much longer: oil’s price fell for the first time in four months in September, and oil traders think demand could take another 18 months to get back to pre-pandemic levels. Even once-loved shale oil companies are teaming up to cut costs and make it through in one piece.
Zooming out: Not-so-magical kingdoms.
Workers all over the world – not just those in the oil industry – are bearing the brunt of coronavirus. Disney announced 28,000 job cuts late on Tuesday, primarily across the parks and resorts that have been forced to shut their doors or limit attendance. And German tiremaker Continental announced on Wednesday it’d be slashing up to 30,000 jobs – or 13% of its staff – in response to weak demand and rising low-cost competition. | 