Shell plans job cuts in its offshore wind industry as its CEO returns its focus to oil and gas

(Bloomberg) — Shell Plc is preparing to cut staff at its offshore wind business as CEO Wael Sawan moves the company away from the capital-intensive renewable energy sector.

According to people familiar with the matter, who asked not to be named because the information is private, the British oil company is expected to begin layoffs within a few months, mainly in Europe.

“We are focused on selected markets and segments to deliver the greatest value to our investors and customers,” a Shell spokesman said. “Shell is looking at how it can continue to compete for offshore wind projects in priority markets while maintaining a focus on efficiency, discipline and simplification.”

Shell has been investing heavily in offshore wind energy as it looks to leverage its experience in offshore oil and gas production to become a leader in the technology. However, rising costs in the industry and a renewed focus on generating profits for shareholders under Sawan led the company to withdraw from green energy sources.

Since Sawan took over as CEO early last year, he has been putting pressure on business units to improve performance and profitability. In June 2023, it unveiled a plan to cut “structural costs” by as much as $3 billion by the end of 2025. The cuts in the offshore wind sector follow layoffs that began in its low-carbon solutions division earlier this year.

Shell has created a team based in the Netherlands whose task is to develop and build offshore wind farms. However, the company’s spending constraints left the large team with less to do than previously expected.

The staff reductions follow the departure of a number of key offshore wind industry executives, including Thomas Brostrom, head of its European renewables business, and Melissa Read, head of its UK offshore wind unit.