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Shell looking to shed jobs and offices as oil prices plunge

Published 25/04/2016

Shell is reacting to the fall in oil prices
Shell is reacting to the fall in oil prices

Oil giant Shell is pushing ahead with plans to cut jobs and close offices in the wake of the plunging oil price and its takeover of BG Group.

The cost-cutting drive will trigger three office closures, including the former BG Group headquarters at Thames Valley Park, Reading; BG's offices at Albyn Place, Aberdeen; and Shell's Brabazon House office, Manchester.

It has also asked staff at the Thames Valley site to apply for voluntary redundancy, while a separate voluntary severance programme has been rolled out to "some UK employees" as oil prices remain persistently low.

The firm revealed last year that the impact of its mega-merger with BG Group - coupled with lower oil prices - would to lead to 10,300 job losses.

It has already made 7,500 job cuts through an efficiency drive, with 2,800 jobs also being lost from its tie-up with BG Group.

Huibert Vigeveno, BG Group chief executive, revealed the office shake-up during an announcement at the Thames Valley Park.

He said: "We now have the outcomes of the UK office footprint review. One of the review's recommendations was to consolidate all Shell's London and South East based operations into central London.

"Our intention is therefore to close the Thames Valley Park campus by the end of this year.

"The review also recommended that all Aberdeen-based onshore operations move to the Shell Aberdeen Tullos office, with BG's offices at Albyn Place closing by the end of this year, and the closure of Shell's Brabazon House office in Manchester by the end of 2017."

Shell, which has a total UK workforce of 7,500, employs 800 people at Thames Valley Park, 300 at Albyn Place and 500 staff at Brabazon House, Manchester.

Staff at Thames Valley will be moved to its headquarters in central London, while employees at its Manchester office will be offered redeployment to the capital. It will also transfer w orkers at the Albyn Place to its Tullos office in Aberdeen.

The firm said any staff that leave the company as part of the severance programme will counted as part of its drive to cut 10,300 jobs.

Shell described the takeover of BG as a ''new chapter'' in February when it announced an 80% plunge in annual profits triggered by the tumbling oil price.

The cost of crude has collapsed by more than 70% since a peak of around 115 US dollars a barrel in the summer of 2014.

Shell saw full-year earnings tumble to 3.8 billion US dollars (£2.6 billion) in 2015 from 19 billion US dollars (£13 billion) in 2014, when it reported its annual results at the beginning of February.

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