Shares of Royal Dutch Shell Plc (LON: RDSA) today surged 2.25% after the oil major confirmed that it is planning to cut 7,000 to 9,000 jobs in order to save $2 billion to $2.5 billion annually by 2022.
The company revealed that the job cuts are part of a major restructuring effort aimed at cutting its costs by $3 to $4 billion by the end of Q1 2021. Approximately 1,500 employees are set to take voluntary redundancy.
Shell revealed that the margins in its natural gas business have been affected negatively by low prices given that gas prices usually trail crude oil prices by up to six months.
The company’s oil production in the Gulf of Mexico had also been affected by Hurricanes, which saw production fall by 60-70,000 barrels a day reducing current output to a meagre 2,150- 2,250 barrels per day.
Shell’s margin in its oil products division is likely to be lower in the second quarter amid rising marketing costs.
Shell share price
Roday Dutch shell shares surged 2.25% to trade at 1006p having risen from Tuesday’s closing price of 983.8p.