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Royal Dutch Shell To Cut 10,000 Jobs As Annual Profits Plummet

By February 5, 2016 at 11:03 pm
Royal Dutch Shell To Cut 10,000 Jobs As Annual Profits Plummet (Photo : Justin Sullivan | Getty Images News)

HAGUE, NETHERLANDS - Royal Dutch Shell, a multinational oil and gas company, confirmed its decision to cut 10,000 jobs worldwide as its annual profits plummeted by 87 percent due to oil prices. However, its shares have gone up after it made the job cut confirmation, BBC News reported on Thursday.

Royal Dutch Shell has posted its biggest decline in yearly earnings within at least 13 years. It only gained $3.8 billion during the fourth quarter of 2015 from $19 billion of the same quarter in 2014, causing a 44 percent decrease in annual profits, the company revealed in a statement released on February 4.

Despite the continuing decrease of oil prices - from $100 a barrel about a year and a half ago to the current price of $30 per barrel - the Anglo-Dutch oil company is able to maintain its dividend payout to its shareholders, lessening the worries of investors.

Ben van Beurden, chief executive of Royal Dutch Shell, said the company is making substantial changes to respond to the on-going lower prices of oil as it enters a new chapter with plans to acquire its British rival company, BG Group.

"The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company and improving shareholder returns," he said.

"As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies."

According to report of ABC News Australia, shareholders of Royal Dutch Shares and BG Group are in favor of the of business acquisition that van Beurden is expecting to complete after a few weeks. He further said the company would still manage the costs even when the oil prices are unstable.

"In 2015, we significantly curtailed spending by reducing the number of new investment decisions and designing lower-cost development solutions," he said.

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