Shell to Cut Hundreds of Jobs in Oil and Gas Exploration Operations

Energy giant Shell has revealed plans to significantly reduce its workforce in its oil and gas exploration operations, marking the latest step in CEO Wael Sawan's ambitious cost-cutting initiative. The company aims to slash up to $3 billion (£2.3 billion) in costs by the end of 2025.

Key points of the announcement include:

1. About 20% of jobs will be cut in two subdivisions responsible for exploration strategy and developing oil and gas finds.
2. The cuts are subject to consultation with employees in offices worldwide.
3. Offices in Houston and The Hague are expected to be most affected, with less impact on UK operations.
4. These reductions are part of Shell's upstream division, which accounted for over a third of the company's $28 billion in adjusted profits last year.

A Shell spokesperson stated, "Shell aims to create more value with less emissions by focusing on performance, discipline and simplification across the business. That includes delivering structural operating cost reductions of $2bn-$3bn by the end of 2025, as announced at our capital markets day event in June 2023."

Despite these cuts, Shell plans to continue growing its gas production in the coming years. This strategy has drawn criticism from climate experts who warn that new oil and gas projects are incompatible with limiting global heating to within 2°C of pre-industrial levels.

This announcement follows earlier job cuts in Shell's low-carbon solutions division, which provoked outrage from climate campaigners and some Shell employees. Two staff members even wrote an open letter urging Sawan not to scale back investments in renewable energy.

Since taking over as CEO in January 2023, Sawan has:

1. Abandoned plans to cut oil production
2. Instituted a cost-cutting program to increase profits
3. Already made $1.7 billion in cost savings across the business

The company, which reported $40 billion of operating expenses last year, has already reduced jobs in areas including its chemicals and wind business, as well as centralizing functions like legal and communications teams.