Sector News

Shell outlines BG consolidation plans

April 26, 2016
News

Royal Dutch Shell PLC will offer a new voluntary severance program for employees and plans to close a number of U.K. offices in the wake of its roughly $50 billion acquisition of BG Group PLC, the company said Monday.

The Anglo-Dutch oil giant has proposed plans to consolidate its London operations in central London and close its Thames Valley Park campus by the end of the year. The company also intends to close BG’s offices in Aberdeen by the end of 2016 and Shell’s Manchester offices by the end of 2017.

The company didn’t specify how many job losses might accompany the office closures but has previously said it expects to lose 2,800 jobs world-wide as part of its BG takeover.

The company said it plans to start reducing staff at Thames Valley Park by first offering packages to employees who want to leave. It also intends to offer some staff a selective voluntary severance program as part of its efforts to cut costs in the wake of falling oil prices.

Overall, Shell has announced plans to cut some 10,000 jobs over 2015 and 2016 to combat falling oil prices and consolidate the company following its BG acquisition.

The news comes ahead of Shell’s first quarter results next week, which are expected to show the impact of a continuing slump in oil prices that has buffeted the sector for almost two years. The market environment is a complication for Shell as it seeks to consolidate its holdings and complete $30 billion in asset sales in the wake of the BG deal.

By Sarah Kent

Source: Wall Street Journal

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