Shell prepares cull of top managers?

The oil giant's restructuring could reportedly see a quarter of its senior management lose their jobs...

Last Updated: 31 Aug 2010

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...

In today's bulletin:

Ryanair profits soar despite price cuts
Irate Chinese steel workers kill boss, scupper merger
Shell prepares cull of top managers?
Nick Hood: Paris looks bleak in the global meltdown
MT Expert's Top Ten Tips: Beat negative perceptions of your brand

Find this article useful?

Get more great articles like this in your inbox every lunchtime

A leadership thought: Treat your colleagues like customers

One minute briefing: Create a platform where others can see their success, says AVEVA CEO...

The ignominious death of Gordon Gekko

Profit at all costs is a defunct philosophy, and purpose a corporate superpower, argues this...

Gender bias is kept alive by those who think it is dead

Research: Greater representation of women does not automatically lead to equal treatment.

What I learned leading a Syrian bank through a civil war

Louai Al Roumani was CFO of Syria's largest private retail bank when the conflict broke...

Martin Sorrell: “There’s something about the unfairness of it that drives me”

EXCLUSIVE: The agency juggernaut on bouncing back, what he would do with WPP and why...

The 10 values that will matter most after COVID-19

According to a survey of Management Today readers.