Shell cuts 200 jobs, contracting the hydrogen division
The hydrogen wing of the oil and gas giant is to shrink as the company moves away from work on powering hydrogen cars.
Wednesday 25 October 2023 16:32, UK
Oil and gas giant Shell is set to cut 200 low-carbon jobs and review another 130 next year, in an effort to reduce headcount and to grow profits.
The cuts are to the low carbon solution division and equate to 15% of the roughly 1,300 staff in the department.
Carbon capture storage and nature-based solutions also form the department but will be unaffected, and renewable power will also not be hit.
The light hydrogen mobility unit that worked on hydrogen solutions for cars will see the most cuts: two of four general manager roles in the hydrogen section will be merged, Shell said. Work to move support hydrogen-fuelled heavy goods vehicles will continue.
Some roles will be integrated into other parts of the company which has more than 90,000 employees, Shell added.
Shell had already closed its hydrogen car refuelling points in the UK as consumers chose electric cars. It comes despite the company committing to build Europe's largest renewable hydrogen plant in the Netherlands.
The cuts come as the new Shell chief executive Wael Sawan seeks to boost profits and gas production while keeping oil output steady. Focus on high-margin projects (such as oil when prices are high) is part of his plan.
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Shell's target of cutting oil production each year for the rest of the decade was dropped in June of this year after cutting production by about 20% from a 2019 peak.
Also shelved were any renewable-electricity capacity targets. Instead, it aims to invest more than six times as much on fossil fuels as it will on clean power.
In 2022, Shell spent 17% (£3.5bn) of its total capital expenditure (£20bn) on "low-carbon energy solutions", which included renewable power, electric vehicle charging and biofuels.
Company profits have fallen after hitting an all-time annual high of £32.2bn for 2022. Latest filings showed a big fall in second-quarter profit from $11.5bn (£9.46bn) the year before to just over $5bn (£3.9bn) as energy prices plunged from the Russia-Ukraine invasion peak.
Mr Sawan took the helm in January after his predecessor Ben van Buerden stepped down, having been in the post for eight years.
"We remain committed to investing in viable low carbon business models and focusing on our strengths as we play our part in decarbonisation of the global energy system," Shell told Paste BN.
"This will include ensuring ongoing reliable delivery of energy and decarbonisation products, services, and solutions to our customers."
The fossil fuel company is listed on the London Stock Exchange and headquartered in the UK capital.
Financial results for the third quarter of 2023 will be published on Thursday next week.