CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

6 500 jobs cut at Royal Dutch Shell

Article By: ,  Financial Analyst
July 31, 2015 10:36 AM

Royal Dutch Shell has announced plans to cut 6,500 jobs.

The move is an attempt to cut costs by $4 billion (£2.57) following a drop in oil prices, and the firm says it is planning for a "prolonged downturn" in oil prices.

Currently, the price of oil stands at $53 a barrel. Last year, the price was more than double at $110.

An Anglo-Dutch multinational company, Shell currently employs around 94,000 people and has also announced it will be scaling back oil exploration operations.

In the three months to June 30th, the oil giant reported profits of $3.4 billion – that's a 35 per cent decrease compared to the same period a year ago.

The company said that job cuts would affect contractors, as well as employees and also included job losses in the North Sea and cuts following divestments in Nigeria.

Must be "resilient"

Commenting on the job cuts, chief executive Ben van Beurden said the company needed to take steps to protect itself in case oil prices stay down.

"We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery," he explained.

He added: "We're taking a prudent approach, pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends for shareholders."

Other cuts that the company will be making include selling a 33 per cent stake in its Japanese business Showa. Petrochemical group Idemitsu is buying it for around £1.4 billion. 

In 2014 and 2015, Shell saw $20 billion of asset sales. Between 2016 and 2018, it plans another $30 billion in sales.

The company is also making investments. In April, the firm announced that it was buying BG for £47 billion. According to Shell, the purchase of the UK's third-largest energy company would enhance free cash flow and be "a springboard to change Shell into a simpler and more profitable company".

At closing on Thursday (July 30th), shares in Royal Dutch Shell were up 4.45 per cent to 79.13.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024