Shell to cut 5,000 jobs after poor Q3 results

Anglo-Dutch oil and gas group Royal Dutch Shell today reported a sharp drop in third-quarter earnings and production, which it blamed on the weak global economy, and said it would cut 5,000 jobs.

The job-cut is part of a restructuring programme that began earlier this year. The programme, called Transition 2009, was put in place by Peter Voser, who started as chief executive in July. The cutbacks represent some 4.9 per cent of the corporation's 102,000-member staff, and almost 10 per cent in divisions that Shell is merging.

Voser said in Houston, Texas that the corporation had to take "stringent measures to further improve our performance" and its "competitive cost position". He said although the corporation had some indications that energy demand and pricing are improving, "the outlook remains very uncertain, and we are not expecting a quick recovery".

Voser said the reorganisation, due to be completed by the end of the year, was progressing well and had already reduced operating costs by $1 billion in the first nine months of this year.

The energy giant said production in the third quarter amounted to 2.93 million barrels a day, lower than the 3.39 million barrels analysts had counted on.

Shell's third quarter earnings on a current cost of supplies (CCS) basis were $3 billion compared with $10.9 billion during the same period last year. Basic CCS earnings per share decreased by 72 per cent compared with the like quarter a year ago.