Oil major Shell has said it is to cut around 475 jobs from its UK and Ireland business by the end of this year as it further reduces its cost base.
The firm has already announced more than 10,000 jobs cuts globally, including some 2800 jobs being cut through the Shell's integration with BG Group, which it bought in a US$70 billion deal.
The firm said, despite improvements made to the business, market conditions remained challenging and further cuts were needed.
Paul Goodfellow, Vice President for UK & Ireland told staff at the Shell Aberdeen office yesterday: “We’re continuing the improvement journey we’ve been on to create a competitive and sustainable business in the North Sea. Despite the improvements that we have made to our business, current market conditions remain challenging.
“Our integration with BG provides an opportunity to accelerate our performance in this 'lower for longer' environment. We need to reduce our cost base, improve production efficiency and have an organization that best fits our combined portfolio and business plans.
“As a result we will reduce the size of the organization supporting our UK and Ireland Upstream business by around 475 people. We will look to implement the majority of this change during 2016.
“Following these changes, Shell will still remain a key employer in the North East of Scotland with around 1700 employees.
“The reductions we’re announcing today in Aberdeen are part of a global program of job reductions in Shell. Last year, in response to the oil price downturn, we made the tough but necessary decision to remove 7500 Shell staff and direct contractor roles and this has now been completed. Separately, as previously announced, a further 2800 global staff reductions were initially identified as part of the BG integration, which is now well underway.
“These are tough times for our industry and we have to take further difficult decisions to ensure Shell remains competitive through the current, prolonged downturn.
"In 2016, the number of job reductions in response to low prices and as a result of the BG integration is expected to total at least 5000 globally. This number includes the 2800 integration-related roles previously announced.”