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Shell Sees 7,000 To 9,000 Job Cuts, $2 Bln To $2.5 Bln Cost Savings By FY22; Stock Up

Shares of Royal Dutch Shell PLC (RDS-B,RDSB.L,RDSA.L,RDS-A) were gaining around 2 percent in early morning trade in London after the energy major Wednesday said it expects job reductions of 7,000 to 9,000 by the end of 2022. Reduced organisational complexity, along with other measures, would result in sustainable annual cost savings of between $2 billion to $2.5 billion by 2022.

The expected job cuts include around 1,500 people who have agreed to take voluntary redundancy this year.

Regarding the expected annual cost savings, the company said it will partially contribute to the announced underlying operating cost reduction of $3.0 to $4.0 billion by the first quarter 2021.

The company also projects post-tax impairment charges in the range of $1.0 to $1.5 billion for the third quarter.

In its trading update for the third quarter, the company noted that Integrated Gas sees production between 820 and 860 thousand barrels of oil equivalent per day. LNG liquefaction volumes are expected to be between 7.9 and 8.3 million tonnes.

In Upstream, production is expected to be between 2,150 and 2,250 thousand barrels of oil equivalent per day, which includes a production impact of 60 to 70 thousand barrels of oil equivalent per day from hurricanes in the US Gulf of Mexico.

In London, Shell Class A shares were trading 1.8 percent higher at 1,001 pence, and Class B shares were trading 1.3 percent higher at 969.10 pence.

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