Shell to cut its low-carbon solutions workforce by 15%
Shell will reduce its low-carbon solutions workforce by approximately 15% and downsize its hydrogen operations as part of CEO Wael Sawan's plan to increase profits. The company has confirmed that it will cut 200 jobs in 2024 and review an additional 130 positions. Shell stated, "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." The LCS division does not encompass the renewable power sector.
Hydrogen light mobility operations scaled back
The primary focus of these organizational shifts is Shell's hydrogen business. The company intends to significantly reduce its hydrogen light mobility operations, which create technologies for light passenger vehicles. Additionally, Shell will consolidate two of the four general manager positions within the hydrogen division. This decision comes after the departure of the division's manager, Oliver Bishop, who now heads rival BP's global hydrogen mobility business.
Shell's commitment to net zero carbon emissions
Despite these modifications, CEO Wael Sawan stressed that Shell continues to be dedicated to achieving net zero carbon emissions by 2050. At the Energy Intelligence Forum in London, Sawan stated, "For avoidance of doubt, what hasn't changed is the destination that we have set for ourselves." Last month, Sawan experienced internal pushback when two employees published an open letter urging him not to decrease investments in renewable energy.
Impact on Shell's shares and competitors
Shell's stock, along with European counterparts BP and TotalEnergies, has faced pressure in recent years as investors express concerns about future returns due to declining oil and gas production. In contrast, US competitors Exxon Mobil and Chevron have reinforced their commitment to fossil fuel production, announcing major acquisitions of oil companies in recent weeks. Shell's restructuring aims to address these apprehensions and concentrate on investments with the highest potential for value creation and emissions reduction.
