Another oil and gas giant has announced job cuts in the wake of continually depressed oil and gas prices. With its 2Q15 results, Royal Dutch Shell presented plans to “manage returns in prolonged oil price downturn” that include a 10% workforce reduction (roughly 6,500 jobs) and a 20% (approximately $7 billion) reduction in 2015 capital investment to $30 billion.
The news follows layoffs by another oil and gas supermajor—Chevron Corp. Houston, TX-based Chevron plans to eliminate 1,500 jobs globally as part of streamlining operations aimed at reducing costs by $1 billion.
Oil prices have declined roughly 50% over the last year.
Royal Dutch Shell’s second quarter net income dropped 25% to $3.4 billion compared with $5.1 billion for the same quarter a year ago.
Cash flow from operating activities for the second quarter 2015 was $6.1 billion, compared with $8.6 billion for the same quarter last year. Excluding working capital movements, cash flow from operating activities for the second quarter 2015 was $7.6 billion, compared with $11.0 billion for the second quarter 2014.
In a related streamlining effort, Shell announced plans to sell 33.24% of its stake in Japanese refiner Showa Shell Kekiyu KK to Idemitsu JPY 169 billion (approximately US$1.4 billion). Shell will retain a 1.80% holding in the company following the sale, which is expected to close next year.