Royal Dutch Shell Oil to Layoff 2,800 More Workers

Shell Oil to Layoff
AP File Photo/David N. Goodman

Royal Dutch Shell has announced it will layoff 2,800 more workers.

The announcement, as reported by ABC13 in Houston, comes after a previous announcement by the company to give a pink slip to 7,500 workers and contractors.

The cuts are reported to come after Royal Dutch Shell completes its takeover of competitor, the BG Group. That number represents approximately three percent of the combined workforce.

The deal has been in the works since April when Shell agreed to buy the BG Group for $71 billion. As reported, the decision was made in order to give Shell a 25 percent increase in oil and gas reserves, as well as a larger stake in the liquefied natural gas market.

As reported by the Houston ABC affiliate, a statement from Shell said, “The deal remains on track for completion in early 2016.” Shell also said it had received the go-ahead in the last major regulatory hoop, clearance from the Chinese. The deal has already been signed-off by the European Union, Australia, and Brazil.

As reported by Reuters for Yahoo Finance, the next step is that Shell and BG will send a merger prospectus to their shareholders and will hold meetings to discuss the deal. If it is approved, a court hearing will be held ten days later. It could become final in early February.

The workforce cuts is the equivalent of approximately half of BG’s 5,000 employees.

As reported by the Houston Business Journal, Shell sold about $30 billion in combined assets earlier this year. The combined company plans to spend less on exploration and reorganize its upstream segment and establish integrated gas as a stand-alone organization in anticipation of the acquisition.

In July of this year, Breitbart Texas reported that the continuing weakness in the oil and gas sector caused the ax to fall at Chevron. The company announced that it would lay off 1,500 employees worldwide. Nearly one thousand of those job losses were reported to come directly from Houston. Citing cost reduction efforts, Chevron said that 950 jobs would be cut in Houston, 500 in San Ramon, California, and 50 jobs in international facilities. Chevron released a press statement that the company would be “Focused on increasing efficiency, reducing costs and focusing on work that directly supports business priorities.”

Breitbart Texas reported a boom on the other end of the oil industry, the Houston Ship Channel and industrial plants in southeast Houston. Adam Perdue, Ph.D., University of Houston energy expert, told KHOU in Houston that he predicted a $60 billion manufacturing investment throughout the Houston metroplex over the next four years. “Once some of the new industrial plants are built that will take the natural gas liquids and more natural gas, that will ease the situation some but it won’t fix it,” Shook said.

Oil field service companies have also been cutting costs and jobs. Halliburton and Baker Hughes cut more than 27,000 jobs over the past year, according to a report on the Houston Chronicle’s FuelFix blog. “With market conditions remaining challenging, we have taken decisive actions to strengthen our revenue and reduce our cost structure company-wide to improve profitability and remain competitive in this environment,” Baker Hughes spokeswoman Melanie Kania told FuleFix in an written statement. Adding in the other service industry giants, Schlumberger and Weatherford International, a total of 58,000 jobs have been cut worldwide, as reported by Breitbart Texas.

Lana Shadwick is a contributing writer and legal analyst for Breitbart Texas. She has served as an associate judge and prosecutor. Follow her on Twitter @LanaShadwick2


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