Shell plans to cut 2,800 jobs after buying BG Group
LONDON – Royal Dutch Shell says it expects to cut 2,800 jobs once it completes its takeover of rival BG Group.
The losses amount to about 3 percent of the combined workforce, and come on top of Shell's previously announced plan to shed 7,500 staff and contractor positions.
Shell agreed to buy British rival BG Group for $71 billion in April. The deal will boost Shell's oil and gas reserves by 25 percent and give it a bigger presence in the fast-growing liquefied natural gas market.
Shell said in a statement Monday that "the deal remains on track for completion in early 2016." The company said it had received clearance from Chinese authorities, its last major regulatory hurdle. It has already been approved by Brazil, the European Union and Australia.
"We definitely expect to see layoffs next year,” Patrick Jankowski, senior vice president of research at the Greater Houston Partnership, said.
He expected more than 50,000 jobs lost in the energy industry in a three-year period that started in 2014.
"Someone who is making $200,000 a year suddenly making zero. They're not going to be spending as much in the stores. They're not going to be spending as much in the restaurants," Jankowski said.
He said that would mean fewer people spending money in our economy. But he said our packed Port of Houston, busy Texas Medical Center and our busy airports would help our economy.
"You've got over 5,000 companies in Houston that are selling products overseas. And so what's going to happen is these other sectors, these non-energy sectors are going to help mitigate what's going on in oil and gas," Jankowski said.
Copyright 2015 by KPRC Click2Houston. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.