Royal Dutch Shell To Axe 6,500 Jobs As Oil Prices Slump

Oil giant Royal Dutch Shell PLC said Thursday it will cut 6,500 jobs this year due to falling oil prices. The company also said it was planning for a prolonged market downturn as the drop in oil prices could persist for several years.

While announcing the second quarter results on Thursday, Shell stated that its capital investment for this year will be trimmed by $7 billion and operating costs will be reduced by $4 billion. Further operating cost reduction will be expected in 2016, it added.

“We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery. We’re taking a prudent approach, pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends for shareholders,” Shell’s CEO Ben van Beurden said in a statement.

The Anglo-Dutch conglomerate’s second quarter earnings were $3.4 billion, a decline of 35 percent compared with last year’s earnings in the same period.

"As our results today show, we're successfully reducing our capital spending and operating costs, and delivering a competitive performance in today's oil market downturn," van Beurden said.

However, the company will create 2,000 other jobs, the Express reported. The current headcount of the company across the world is about 94,000, according to its website.

Shell is following in the footsteps of BP PLC and Chevron Corporation in terms of cost cutting measures, as the world’s biggest oil companies struggle with a 50 percent slouch in crude prices in the past year, Bloomberg reported.