Royal Dutch Shell to axe 2,800 jobs

Royal Dutch Shell intends to axe 2,800 jobs after completion of the takeover of assets of BG Group, early next year.

Shell said the cuts, quantified for the first time since the $60 billion deal was announced in April, would affect around 3 per cent of the combined company's permanent workforce. Shell did not announce the businesses or countries which would be affected.

''Shell proposes that office consolidation will be undertaken where practical in certain locations around the world. With regards to office footprint rationalisation in the UK, Shell will, following deal completion, undertake a comprehensive review during the course of 2016,'' www.theguardian.com reported quoting the group.

The post-takeover job losses will be in addition to the 7,500 announced by Shell for its own business as it looked to costs following a slump in oil prices.

Some Shell shareholders are not happy with the BG deal, which was agreed on the assumption oil prices would recover to $90 a barrel by 2020. Oil price has plunged from $115 a barrel in summer 2014 to less than $40, and according to some analysts, it could fall further.

Shell planned to go ahead with the deal by seeking approval from both sets of shareholders. However, according to Standard Life, one of the biggest investors in the UK, the deal could not work with the low oil prices.

"Shell currently expects an overall potential reduction of (about) 2,800 roles globally across the combined group, or (about) 3 per cent of the total combined group workforce," the company said.

Earlier yesterday, Shell said, the takeover had won approval from the Chinese government. The acquisition of BG Group had received approval from the respective authorities in Australia and Brazil, and the European Commission.

With the deal, Shell looks to boost its flagging output, benefiting from BG's strong position in liquefied natural gas.

"I am delighted we now have all the pre-conditional approvals needed to move to the next important phase," Shell CEO Ben van Beurden said, www.bdlive.co.za reported citing other media reports.

"This is a strategic deal that will make Shell a more profitable and resilient company in a world where oil and gas prices could remain lower for some time."