Business

An industry in distress

A few days after Shell sacked 9,000 staff, Chevron also fired 1,000 additional workers in its Nigeria’s operations, a development that shows damning signs of an industry in distress. Adeola Yusuf reports

 

United States oil supermajor, Chevron Corporation, on Friday declared plans to reduce its workforce by 25 per cent in the various levels of the organisation in Nigeria, creating confusion among the workers. This, checks by New Telegraph showed, will affect 1000 workers.

 

A few days before this, Royal Dutch Shell, another oil super major, declared plans to sack 9,000 staff as part of a major shake-up to cut costs and raise annual savings of up to $2.5 billion (£1.9bn) by 2022.

 

The company, which announced this on Wednesday September 30, 2020, declared that around 1,500 of the staff slated for mass sack had agreed to take voluntary redundancy this year–by the end of 2022.

 

The restructuring, a report by SkyNews read, is part of the company’s efforts to adapt to a low-carbon future and becoming more “streamlined,” with the severe impact of COVID-19, which caused a slump in demand for oil and a collapse in prices as a factor.

 

The big axe Shell, which had 83,000 employees at the end of 2019, said that the reorganisation would lead to annual savings of up to $2.5 billion (£1.9bn) by 2022. It said the shake-up was expected to result in 7,000 to 9,000 job cuts – including around 1,500 who have agreed to take voluntary redundancy this year – by the end of 2022. The company would not give a breakdown of how its workforces in different countries would be affected.

 

Shell employs 6,500 the U.K. The company said earlier this year that it was aiming to become a net-zero emissions energy business by 2050. Back to memory lane In May, Shell cut its dividend for the first time since the Second World War in the wake of the coronavirus crisis.

 

The restructuring comes after rival BP in June revealed a shake-up, which will see 10,000 jobs go globally, including 2,000 in the U.K. Shell Chief Executive, Ben  van Beurden, said the company was aiming to become a “simpler, more streamlined, more competitive organisation that is more nimble and able to respond to customers.”

 

He said cost-cutting could include areas such as travel, use of contractors and virtual working and that the pandemic had shown the company can adapt to working in new ways but stressed that “a large part of the cost saving for Shell will come from having fewer people”.

 

Chevron focuses on Nigeria

 

The plan by chevron to sack staff was contained in a statement signed by Chevron Nigeria Limited (CNL’s) General Manager Policy, Government and Public Affairs, Esimaje Brikinn. It explained that the decision was aimed at improving capital efficiency and reduce operating costs in line with the changing business.

 

Those to be affected, the statement read, would continue to retain their employment until the restructuring process was completed. Measures against distress Brikinn explained that with the restructuring, the company will have an appropriately sized organisation with improved processes.

“Chevron Nigeria Limited (“CNL”), operator of the joint venture between the Nigerian National Petroleum Corporation (NNPC) and CNL (the “NNPC/CNL JV”) together with its affiliates, confirms that it is reviewing its manpower requirements in the light of the changing business environment, while continuing to evaluate opportunities to improve capital efficiency and reduce operating costs. “In this process, the company will be streamlining its workforce and improving service delivery and overall performance at all levels.

 

“This will increase efficiency and effectiveness, retain value, reduce cost, and generate more revenue for the Federal Government of Nigeria. “The new organizational structures will, unfortunately, require approximately 25 percent reduction in the work force across the various levels of our organisation. “It is important to note that all our employees will retain their employment until the reorganization process is completed,” he noted.

 

The statement clarified that CNL had no plans to migrate job met for Nigerians outside the country as it promised to continue to support efforts by the Federal Government to build a prosperous Nigeria through employment generation.

 

According to him, “we have prospects for our company in Nigeria; however, we must make the necessary adjustments in light of the prevailing business climate; and we need everyone’s support to get through these tough times stronger, more efficient and more profitable, in order to sustain the business.”

 

He stated further that CNL was in alignment with both its joint venture partners, the NNPC, and the Department of Petroleum Resources (DPR), in this process, and “we are actively engaging our workforce to ensure they understand why this is being done.

We will continue to consistently engage all relevant stakeholders, including the leadership of the employee unions as we continue this process of business optimisation.

 

“At CNL, the welfare and safety of our workforce is one of our highest priorities. Making changes to the organization is never easy for anyone that will be impacted, but it is necessary to improve our ability to remain competitive in Nigeria.

 

“Reducing the cost and improving the efficiency of our operations is critical to generating more revenues for the Federal Government of Nigeria.” Helpless labour Unions The labour unions in Nigeria

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