Shell is set to close three major offices in the UK and has invited some staff to take voluntary redundancy packages.
The company emphasised it is not making workers compulsorily redundant and that the move is part of the group’s intention to reduce overall head-count as part of its mega-merger with BG.
Consequently, the BG office in Albyn Place will close by the end of this year, with 300 staff moving to Shell’s existing pre-merger Aberdeen office at Tullos.
The move is the outcome of an internal Shell review, which also recommends that all Shell operations in south-east England are re-located to Shell’s UK head office next to London’s Waterloo station.
As a result, the oil giant’s Thames Valley Park office in Reading, Berks., will also close by the end of the year. In Manchester, Brabazon House will also close by the end of 2017.
A Shell spokesman said: “We have also informed staff of a proposal to offer a selective voluntary severance programme for some UK employees. This is in the context of the reality of a lower for longer oil price environment, and is not exclusively related to the Shell-BG merger.”
The news heralds the start of what is expected to be a slew of poor first-quarter results this week in the oil and gas sector, starting with BP.
An ever intensifying oil supply glut took global prices to a near 13-year low of $27.10 a barrel on 20 Jan 2016, exacerbating pressure on oil producers already grappling with a more than 70% slide in prices since Summer 2014.
Oil companies have slashed spending budgets by more than 25% since 2014, scrapped dozens of multi-billion dollar projects, slashed tens of thousands of jobs and reduced costs by at least 20% in the face of the price slump.
“The 1Q16 reporting period looks set to be even worse than what we thought was already an especially ugly 4Q15,” said Jason Gammel, equity analyst at Jefferies.