Bloomberg reports that Royal Dutch Shell is set to take a series of measures to strengthen its resilience during the COVID-19 crisis, including offering voluntary severances to staff.
The company has already substantially cut its costs, including a two-thirds reduction in its dividend payment, in preparation for what looks likely to be a challenging year for the oil industry, which may face lower demand due to reduced industrial activity. Many other oil companies have taken similar steps.
According to sources talking to Bloomberg, Ben van Beurden, Shell’s chief executive officer, wrote a note to staff outlining how the organisation will make further changes in order to enhance efficiency and resilience.
Shell, which also makes downstream products like commercial vehicle oil, is not looking at compulsory redundancies, but it will look to reduce its workforce by offering staff voluntary severance while also cutting back on external recruitment. It will also review its contracts with expatriate staff. Bloomberg’s sources also mentioned the possibility of further job cuts later in the year. Staff have also been advised to moderate their salary expectations in the coming year and a half.
When Bloomberg contacted Shell about van Beurden’s memo, the company responded:
“Over the coming months we will go through a comprehensive review of the company. Where appropriate we will redesign our organization to adapt to a different future and emerge stronger.”
While the oil industry will clearly need to adapt in the face of an unprecedented crisis and an uncertain future, Shell appears to be stopping short of compulsory job cuts.