USA 
United Kingdom
Reports say oil and gas giant Shell, is planning to cut down its workforce by 20% as it continues to increase its renewable energy business.
The job cuts are expected to affect roles in its oil and gas exploration division, according to Reuters.
The report also mentioned that the company’s exploration and development and subsurface divisions will undergo restructuring and the effect of the layoffs will be felt in Shell’s offices in Houston, Texas and The Netherlands. The layoffs may also affect its offices in the UK, albeit to a lower extent.
Following the appointment of CEO Wael Sawan, the company has been focusing on increasing shareholder value by improving performance and simplifying business operations. A key part of the strategy includes cutting costs by $2-$3 billion by the end of 2025.
Shell has divested several of its refineries and pulled back from investments in the renewables sector. In 2022, the company sold its Deer Park Refinery to Pemex and its refinery in Mobile Alabama, to Vertex Energy.
Houston's employment landscape has been heavily dominated by the oil and gas industry for decades, employing an estimated 9,000 workers in the region. The layoffs have not yet been confirmed.
Shell is one of the largest energy players globally and has helped Houston establish its importance in the energy landscape.
The company’s Energy Transition Strategy 2024 report states that Shell will be shutting down about 1,000 gas stations over the next two years, as it channels resources toward expanding services for electric vehicles.
Companies in the sector are now focusing on producing more crude with fewer employees to reduce costs. The reduction in spending is highly influenced by pressure to improve shareholder return. As a result, companies are trying to reduce capital expenditures and redirect profits toward generating more shareholder value.
According to analysts, Shell currently spends more on exploration and production activities than its competitors. The recent focus on reducing expenses would bring it in line with typical spending in the sector.
As the fossil fuel giants reluctantly move towards a business model based more on renewable energy sources, it is inevitable that there will be less demand for its more typical roles in oil and gas, but the shift to new forms of energy will create new openings and require workers with a very different skillset.
