As Shell prepares to announce its latest results this week (which are widely expected to be unimpressive), reports suggest that new CEO Peter Voser is set to take the axe to the oil giant’s senior management, with up to 600 people expected to get the chop. Shell has been trying to play down the reports this morning, but it’s clear that Voser’s restructuring plans are going to see lots of managers out of a job. Cuts like these would be fairly aggressive anywhere – but at a hugely profitable company like Shell, where managers have long enjoyed an almost Civil Service-esque attitude to tenure, it’ll be particularly revolutionary. We can see the argument for making Shell leaner and meaner, but it may be a painful process…
After all, Shell’s not exactly on the breadline. It made $26bn in profit last year, and recently became the world’s largest company by market capitalisation. It’s had a tougher time this year, with lower oil prices dragging its figures downwards – but now prices are slowly but surely starting to rise again, this won’t last forever. However, new broom Voser seems determined to sweep clean: he’s already cut about a quarter of the company’s senior managers, and he’s now apparently planning to do the same with the layer of management just beneath that. This would mean about 500-600 people getting the boot, including some in the UK.
Admittedly the top brass had been warned. Back in May, Voser told a meeting of the company’s top 200 managers that he wanted to cut Shell’s workforce by almost 10%, and would be asking many of them to re-apply for their jobs. Shell has always had a reputation for being a fairly bureaucratic place that treated its managers well – its old slogan of ‘You can be sure of Shell’ was equally true of its attitude as an employer. Voser clearly thinks a shake-up is required to bring the organisation into the 21st century and help it compete with rivals like Exxon Mobil – so even for those bosses that survive the cull, it’s unlikely to be such a cushy number from now on.
Some of these jobs will go because Voser is merging or streamlining some of its divisions. But it sounds a lot like the former FD is also keen to bring about a change of culture at Shell – possibly the biggest such change in 100 years, in fact. Brave man...
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