Related topics

Shell Announces Plans to Reduce Workforce By Up to 4,650 Employees

July 2, 1991

HOUSTON (AP) _ Shell Oil Co. says it will cut its workforce by up to 15 percent in response to disappointing financial results that include a stiff decline in first quarter earnings this year.

The Houston-based petrochemical company said it will offer voluntary severance plans to some employees, but a spokesman said Monday that some involuntary layoffs are likely.

″Shell’s business reviews indicate the need for workforce reductions,″ Shell spokesman H.R. Hutchins said. ″Our best estimate today is that reductions could reach 10 to 15 percent overall nationwide. They will be done over a 12- to 18-month period beginning immediately.″

Shell, a wholly owned subsidiary of Royal Dutch Shell Group, employs about 31,000 people in the United States, meaning as many as 4,650 people could be affected by the reductions.

″It’s a response to disappointing financial results,″ Hutchins said.

Shell posted first quarter earnings in April of $125 million, down 39 percent from the same period in 1990, on sales of $5.67 billion. The company blamed lower crude oil and natural gas prices for the drop in earnings.

For all of 1990, Shell’s profit fell 26 percent to $1.04 billion on sales of $24.4 billion.

During the next several weeks, Shell will be offering the severance plans to some employees.

″The first thing is to offer voluntary severance plans to certain employees. Once those all are identified, then there still may be some involuntary layoffs,″ Hutchins said. ″We also will reduce the use of outside contractors where practical and hope that natural attrition will also play a factor here.″

Hutchins declined to say what Shell divisions will be most severely affected by the employment reductions.

″What we’re saying at this point is that the extent of the reductions is expected to vary,″ he said.

The voluntary severance plan includes three weeks pay for every year of service, with 15 weeks pay as a minimum and 1 1/2 years pay as the maximum.

Shell also is offering professional assistance, counseling, extended health insurance coverage, liberalized pension eligibility and enhanced severance benefits to workers who lose their jobs either through voluntary or involuntary layoffs.

Earlier this month, Shell announced plans to sell its Wilmington refinery in Carson, Calif., as part of the company’s other cost-cutting measures.

Update hourly