Shell, one of the world’s largest energy companies, is set to cut 200 jobs as part of its cost-saving strategy, a move that signals a significant downsizing in its hydrogen division. This decision, announced by Chief Executive Wael Sawan, aims to reduce costs by up to $3 billion (£2.5 billion) across the company by the end of 2025.
Most of the job cuts are expected to occur within Shell’s hydrogen arm, with an additional 130 positions at risk within the broader low-carbon division. The affected employees were notified of the impending changes through an internal memo, with the layoffs scheduled for next year.
While a Shell spokesman emphasized that such changes are common in large businesses and that the company remains committed to achieving net-zero emissions by 2050, the move raises concerns about the company’s commitment to the hydrogen sector.
In the past, Shell has been a proponent of hydrogen-fueled vehicles and invested in a network of hydrogen-fueling stations, including locations at Gatwick Airport and various motorway service stations. However, these investments have been hampered by a lack of demand, leading to station closures.
Wael Sawan, who took over as Shell’s CEO earlier this year, has been focused on increasing the company’s value compared to its global competitors. To demonstrate this commitment, he raised Shell’s dividend by 15% and announced share buybacks worth at least $5 billion. Nevertheless, Shell’s competitors in the United States, including Exxon Mobil and Chevron, have been actively acquiring other businesses, potentially creating additional pressure for Shell.
A Shell spokesman clarified that the restructuring involves simplifying the business structure within its low-carbon solutions business, and some employees will be integrated into other parts of the company.
This cost-cutting move, while part of Shell’s broader strategy to enhance profitability, underscores the ongoing challenges facing the hydrogen sector, particularly in terms of commercial viability and consumer adoption. The hydrogen industry, which has immense potential as a clean energy carrier, must continue to address these challenges to secure its place in the global transition to a sustainable energy future.
