Oil and gas major Shell is planning to axe a minimum of 15% of jobs at its low carbon solutions (LCS) unit as well as trim down its hydrogen business, reported Reuters.
The job cuts and scale-back are part of Shell CEO Wael Sawan’s efforts to increase profits.
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Sawan, who became the CEO earlier this year, has promised to change Shell’s approach by focusing on projects with higher profit margins, maintaining oil production levels and increasing natural gas output.
As part of an effort to reduce the workforce in the LCS unit, which employs around 1,300 people, Shell plans to eliminate 200 jobs in 2024 and has put another 130 roles under review.
Some of these positions will be incorporated into other divisions of Shell, which has more than 90,000 employees.
“We are transforming our Low Carbon Solutions (LCS) business to strengthen its delivery on our core low-carbon business areas such as transport and industry,” Shell was quoted as saying.
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By GlobalDataThe LCS unit comprises the hydrogen business and other operations focused on decarbonising the transportation and industrial sectors.
The renewable power industry is not part of the LCS division.
According to company insiders, Shell officials disclosed the job lay-offs and organisational changes at several town hall meetings last week.
Shell’s carbon capture and storage, and nature-based solutions businesses, which are also included in the LCS division, will not be impacted by the lay-offs, the sources said.
The energy company said that it will concentrate on heavy mobility and industry and drastically reduce its hydrogen light mobility operations, which develop solutions for light passenger cars.
It will also combine two of the four general manager positions in the hydrogen business.
“Our global hydrogen portfolio remains a key part of our efforts to address the commercial and technical challenges in scaling our Low Carbon Solutions business,” Shell added.
“We will be disciplined in only making investments with the highest chance of creating value and lowering emissions.”
Last week, Shell signed a 27-year liquified natural gas supply deal with QatarEnergy.
