Sept. 30 (UPI) -- Oil producer Royal Dutch Shell announced Wednesday it will lay off thousands of workers by the end of 2022 as part of a step toward renewable energy.
The job cuts, which Shell said could number 9,000, represent more than 10% of the company's workforce and include about 1,500 who have volunteered to be part of the reduction, the company said in a third quarter update.
The cuts are expected to reduce costs by as much as $2.5 billion within two years -- and are part of a drive by Shell to reduce "organizational complexity" and restructure operations for net-zero emissions by 2050.
"We will have some oil and gas in the mix of energy we sell by 2050, but it will be predominantly low-carbon electricity, low-carbon biofuels, it will be hydrogen and it will be all sorts of other solutions too," Shell CEO Ben van Beurden said in a statement, calling the cuts "very painful."
"[We] will be saying goodbye to people we know well and really like and who have great loyalty to the company. But we are doing this because we have to."
Shell said it will report sharply lower oil and gas production in its third-quarter earnings report, citing the pandemic and hurricane-related shutdowns of oil platforms in the Gulf of Mexico where production was curtailed by the equivalent of up to 70 thousand barrels of oil per day.
The company also said it expects gasoline sales to rebound in Q3, after COVID-19 lockdowns eased in many parts of the world.