Shell to Cut 15% of Low-Carbon Solutions Division Amid Strategic Pivot, Affects 200 Jobs

Shell announced on Wednesday that it will reduce its workforce by approximately 15% in the low-carbon solutions division. This move comes as part of CEO Wael Sawan's initiative to drive profitability within the company.

A Reuters report noted that the strategic changes aim to prioritize higher-margin projects, maintain stable oil production, and expand natural gas output.

Staff Cuts and Organizational Changes

According to Nasdaq, Shell confirmed that it plans to cut 200 jobs by 2024, with an additional 130 positions under review. These measures are intended to decrease the headcount in the low-carbon solutions division, which currently comprises around 1,300 employees.

As part of the restructuring, some roles will be integrated into other sections of Shell. With over 90,000 employees worldwide, the company is committed to optimizing its operations.

Scaling Back Hydrogen Business

Shell emphasized its commitment to enhancing the delivery of core low-carbon business areas such as transportation and industry. The LCS operations encompass various initiatives focusing on decarbonizing the transport and industry sectors. Notably, the renewable power business is not included in the LCS operations.

The hydrogen business, a significant component of the LCS operations, will undergo considerable scaling back. Shell plans to refocus its hydrogen light mobility operations, primarily centered on developing technologies for light passenger vehicles. In line with this strategy, two of the four general manager roles within the hydrogen business will be merged to streamline operations.

"Our global hydrogen portfolio remains a key part of our efforts to address the commercial and technical challenges in scaling our Low Carbon Solutions business," Shell said.

CEO Wael Sawan recently stated that Shell "will be disciplined in only making investments with the highest chance of creating value and lowering emissions."

Towards Green Hydrogen Production

Over the years, Shell has played a pioneering role in supporting hydrogen-fueled cars. However, due to consumer preferences shifting towards electric vehicles, the company has closed several hydrogen fuelling stations worldwide, including some in Britain.

Despite the scaling back of the hydrogen business, Shell remains committed to green hydrogen production. The company is currently constructing a 200-megawatt electrolyzer plant in the Netherlands, which is poised to become Europe's largest facility for producing zero-carbon, or green, hydrogen.

Additionally, Shell applied for a grant to establish a low-carbon hydrogen hub in Louisiana, although the project did not receive funding in the recent announcement of U.S. federal grants.

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