You’ve probably seen Ben’s note today (May 20). What do you think is coming?
23 replies (most recent on top)
Oil & gas is not going away, but Shell is trimming it oil & gas business. Do youself a favor, look for oil & gas operators that are still hiring, especially midstream.
Obviously he thinks there is no future for Shell left as an oil and gas company, and that the only way to survive is to jump on the green bandwagon. Reorg will be heavily aimed at turning into a utility company. Latest rumor from the Hague is that goal is 40% smaller company by year end.
I just don't see oil going away.
Big challenges ahead for Shell and other oil majors that have ambitions to reinvent themselves as "green". Among many other things it will take a huge shift in the culture deeply ingrained in the DNA of these organizations. The things that have built these companies over the past 100+ years aren't the things that can be allowed to remain in the future. There is an argument that there is a pending train wreck.
New oil megaprojects will become stranded assets and the Shell way of working is too bloated for renewables or anything else that needs to be lean. Big challenge ahead.
Shell is Top Quartile at reinventing itself!
Too many re-org too often. What is the new would be old again in the org chart. Can this company have better things to do than keep doing re-org?
Thoughts on the Chemicals business?
Ben is unveiling the plan to transform the core of the new business model:
Recognize that the era of hydrocarbon dominant energy does not easily fit in societal sustainability.
Divest "centuries old" means of generating energy and transform to the emerging societal persuasion of ecological responsible power generation, storage and transmission.
During the transition retain the cash generation engines and remodel their organizations.
Unload the rest.
Shell oil will most likely focus on green power post reorganization. Refineries are done.
Time for Ben to sell his TESLA
Ben and his incompetent team of VPs have ruined a once proud and prosperous global giant. RDS overpaid for BG and has squandered much needed $$ on frivolous Green projects. Time to get rid of Ben!
when "everyone became a leader" no one was the leader
Unconventionals buys assets for 5 billion and sells for500 million Done that a few times. Great leaders
No wonder they are being kicked to the curb
“ It sounds like he wants to get rid of money pit assets in Unconventionals”
This would be the logical thing to do, cut the cord, it’s been dragging the company down for years.
It sounds like he wants to get rid of money pit assets in Unconventionals.
Colleagues,
There are plenty of things that aren’t yet clear to me in this crisis. But some things are: there’s the great care and resilience you continue to show in response to COVID-19 and its economic impact. The fact that the challenges we are facing will – in time – come to an end. And that before then, the crisis will be with us for a while; as one part of the world moves into a new phase of its fight against the virus and its consequences, another takes its place.
Recognising that, I’d like to take some time to update you on our response both in the short term, but also beyond.
In the short term, we are already pulling levers early and decisively to help preserve cash and reinforce the financial strength of our business, by reducing our capex and opex, for instance, and by rebasing our dividend. When it comes to our people, we have significantly reduced external recruitment, begun reducing the contingent workforce, and are challenging our thinking around expatriation. We have just launched Selective Voluntary Severance in a group of countries.
The outlook has also meant that we have set Group performance-based bonuses to zero for 2020, and set very low expectations for salary increases over the next 18 months. At the same time, we have so far delayed any COVID-19-related redundancies until at least the second half of the year. I know some of the steps we have taken may have a big impact on you. But all of them, in their own way, will contribute significantly.
Whilst we need to keep scrutinising every dollar, we also now need to look at the medium term. Beyond the immediate impact of COVID-19 on our economies and on conditions in our sector, it’s clear to me that we need to consider how we play our part in a world that will be different to the one we have been operating in – not least in the context of the energy transition – and how we make sure that Shell emerges stronger in that world.
The Executive Committee and I have therefore initiated a review of our portfolio and organisation. Here, I want to explain why, what we hope to achieve, and what happens next.
Reshaping Shell
Confronted by the biggest health and economic crisis in decades, two more things are clear to me. First, that our purpose and our core values remain at the heart of everything we do. Second, that embracing and, where necessary, adapting to the change is our only option. Companies that choose to learn today will come out on top tomorrow. We need to be more curious and engaged with the world around us than we ever have been before.
This doesn’t just apply to Shell, of course. In evaluating the different parts of our business, we will be doing the kind of necessary thinking any responsible organisation will be doing now. In our case, through a careful, coordinated and comprehensive review over the coming months, I want us to be able to reshape a portfolio that is resilient and delivers on our ambitions. I want us to manage our costs to ensure we remain competitive. To redesign our organisation to become a simpler, leaner, customer-first and entrepreneurial organisation, one which delivers world-class asset management and the most integrated value for Shell, and which delivers on our net-zero emissions ambitions.
Let me be clear: we will be decisive, but deliberate. The decisiveness and clarity in those earlier steps – to reduce our capital and operating expenditure, as well as our dividend – were important. The prudent steps that we have already taken to help preserve cash have bought us valuable time and allow us to take the medium-term decisions thoughtfully. Amid so much uncertainty, we owe it to you, our customers, investors and other stakeholders to provide clarity on how we are positioning Shell for the future.
Respect, honesty and integrity
As we go through the review of our organisation, you will have my commitment, too, that we will work with honesty, integrity and respect for our people. That means considering any potential job losses and impact on people with great sensitivity. It will mean not dodging hard questions. And it will mean communicating clearly, frequently and in a timely way as the work develops – even though I know we won’t always have the answers you’re looking for.
Some parts of the organisation will be more affected than others, in some areas we will be able to go faster than in others, and in some areas change is already under way. While it’s still early days in the review, and its eventual implications will take several months to work through, I will update you on progress regularly. We currently expect to be clear on the future shape and size of the organisation by the end of this year.
I expect these steps to have significant implications. But in the world we are operating in now, I know they are also the unavoidable and responsible ones to take. So I see no choice but to look on them as an opportunity. By reviewing our organisation, I know we can give ourselves the clarity we need to adapt to a different future. I know we can set ourselves up in the way we need to emerge stronger. And I know we can give ourselves the best chance to meet and beat the demands placed on us as we thrive through the energy transition to come.
In the meantime, and until my next update, thank you for everything you continue to do in unprecedented times. Take care of yourselves, your families and each other.
Ben
Us has more lenient labor laws.
Always US first. Euro/social countries take more time/processing. EMEA will be next.
Can someone post Ben’s note? I was packaged out this last re-org after 31 years. Thanks
I wish he would spinoff Shell US, but I think they will cut the legs off and watch us wither.
It's clear that our management culture has no respect for good technical work (or recognition of bad technical work)–they are just "leaders." As such, they believe they can lead anything...oil exploration, refining...or electricity, solar, wind. Why would we be good at any of those activities if we don't have any technical expertise?
re-org and lay off
Looked like an indirect way of saying there will be massive layoffs. Didnt specify country or region, but I am assuming US jobs first.