Shell to Cut Workforce and Scale Back Hydrogen Business in Drive to Boost Profits

Shell India

In an effort to enhance profitability and refocus its strategy, Shell has announced significant workforce reductions and organizational changes within its low-carbon solutions division, Reurters news report said.

The move follows the vision set by CEO Wael Sawan, who took the helm in January, to prioritize higher-margin projects, stabilize oil production, and expand natural gas output.

Shell confirmed that it will eliminate at least 15 percent of the workforce within its low-carbon solutions division, which employs approximately 1,300 individuals. In addition, another 130 positions are under review for potential reduction, with some roles likely to be integrated into other parts of the company. Overall, this restructuring will result in a reduction of 200 jobs by 2024, Reuters news report said.

“We are transforming our Low Carbon Solutions (LCS) business to strengthen its delivery on our core low-carbon business areas such as transport and industry,” Shell stated.

The llow-carbon solutions division encompasses various activities aimed at decarbonizing the transport and industry sectors, excluding the renewable power business. This division also includes Shell’s carbon capture and storage and nature-based solutions businesses, which will remain unaffected by the current round of cuts.

The primary focus of these changes centers on Shell’s hydrogen business. Shell intends to significantly scale back its hydrogen light mobility operations, which focus on technologies for light passenger vehicles. Instead, the company will shift its attention towards heavy mobility and industry. Furthermore, two of the four general manager roles within the hydrogen business will be merged.

Shell’s retreat from the light mobility sector coincides with the departure of Oliver Bishop, the former manager of this business. Bishop now leads BP’s global hydrogen mobility business. Although Shell was an early supporter of hydrogen-fueled vehicles, it has gradually closed several hydrogen fueling stations worldwide due to the increasing popularity of electric vehicles.

However, Shell remains committed to its hydrogen portfolio. It is currently constructing a 200-megawatt electrolyser plant in the Netherlands, Europe’s largest, to produce zero-carbon, or green, hydrogen. The company has also applied for a grant to develop a low-carbon hydrogen hub in Louisiana.

Shell’s CEO, Wael Sawan, reaffirmed the company’s goal to become a net-zero carbon-emitting company by 2050, emphasizing that the destination has not changed, only the pathway.

These changes come after internal pressure was exerted on Sawan last month when two employees issued an open letter urging him not to reduce investments in renewable energy, sparking an internal debate.

Shell’s decision to cut jobs and restructure its low-carbon solutions division is part of a broader effort by the company to adapt to changing market dynamics and investor demands in a world increasingly focused on sustainability and clean energy solutions.