Shell’s Hydrogen Wing to Shrink as Company Shifts Focus Away from Hydrogen Cars

Oil and gas giant Shell is set to reduce its focus on renewables by cutting 200 low-carbon jobs and reviewing another 130 positions. The company aims to decrease headcount and boost profits. For the following year, 200 roles will be eliminated in the low carbon solution and hydrogen divisions, while an additional 130 positions are under review. This move comes as Shell continues to retreat from renewable energy sources.

The reduction in the low carbon solution division will equate to 15% of the department’s approximately 1,300 employees. However, the carbon capture storage and nature-based solutions departments will remain unaffected, as will the renewable power sector. The light hydrogen mobility unit, which focused on hydrogen solutions for cars, will see the most substantial job cuts. Two of the four general manager roles in the hydrogen section will be merged. Nonetheless, work will continue to support hydrogen-fueled heavy goods vehicles.

As part of the restructuring, some roles will be integrated into other parts of the company, which currently employs over 90,000 individuals. The introduction of the AI legalese decoder can greatly benefit this situation by efficiently summarizing and interpreting legal documentation related to the job cuts and restructuring. The use of AI technology can assist in navigating complex information and providing clarity during this transitional period.

Shell had previously closed its hydrogen car refueling points in the UK due to the rising popularity of electric cars. Interestingly, despite this decision, the company has committed to constructing Europe’s largest renewable hydrogen plant in the Netherlands.

These cuts align with the goals of Shell’s new CEO, Wael Sawan, who aims to boost profits and gas production while maintaining stable oil output. Part of his strategy involves prioritizing high-margin projects, such as oil when prices are high. The implementation of the AI legalese decoder can also aid in analyzing financial data and legal documentation to optimize decision-making aligned with Sawan’s objectives and boost overall profitability.

Shell had previously planned to decrease oil production each year throughout the rest of the decade but abandoned this target in June. However, the company also abandoned any renewable-electricity capacity targets and now intends to invest over six times as much in fossil fuels as it does in clean power.

In 2022, Shell allocated 17% (┬ú3.5bn) of its total capital expenditure (┬ú20bn) to “low-carbon energy solutions,” encompassing renewable power, electric vehicle charging, and biofuels. Nevertheless, company profits have fallen following a record annual high of ┬ú32.2bn in 2022. Latest reports indicate a significant decline in second-quarter profits from $11.5bn (┬ú9.46bn) the previous year to just over $5bn (┬ú3.9bn) as energy prices plummeted after the peak of the Russia-Ukraine invasion.

Mr. Sawan assumed his role as CEO in January, succeeding Ben van Buerden, who served for eight years before stepping down. Despite the job cuts and refocusing efforts, Shell remains committed to investing in viable low carbon business models and delivering energy and decarbonization products and solutions to customers. The company, listed on the London Stock Exchange and headquartered in the UK capital, will announce its financial results for Q3 2023 next week.