Shell Plc is making significant changes to its offshore wind business as CEO Wael Sawan shifts the company away from the capital-intensive renewable energy sector. The British oil major is expected to begin layoffs within months, particularly in Europe. The decision to cut staff comes as Shell focuses on select markets and segments to maximize value for investors and customers.
Shell had been investing heavily in offshore wind, looking to leverage its expertise in extracting oil and gas at sea to become a leader in the technology. However, rising costs in the sector and a renewed emphasis on delivering returns for shareholders have prompted the company to step back from this form of green energy. Sawan, who took on the CEO role at the beginning of last year, has been pushing business divisions to enhance performance and profitability.
In June 2023, Sawan announced a plan to decrease “structural costs” by up to $3 billion by the end of 2025. The upcoming staff cuts in the offshore wind business follow earlier staff reductions in the low-carbon solutions unit. Shell had established a team in the Netherlands focused on developing and constructing offshore wind farms. However, restrictions on spending meant that the team had less work than initially anticipated.
Several key executives in the offshore wind business, including Thomas Brostrom and Melissa Read, have left Shell. Brostrom was the head of the European renewable power division, while Read led the UK offshore wind unit. As Shell continues to refine its strategy and consolidate its operations, these upcoming staff cuts are part of its efforts to streamline and prioritize its focus.
The decision by Shell Plc to reduce staff in its offshore wind business reflects growing concerns over rising costs and dwindling profits in this sector.
Sawan’s push for improved performance and profitability has led him to reevaluate where resources are being allocated within Shell’s various businesses.
As a result, several key executives have left their positions at Shell’s offshore wind division following earlier layoffs in other low-carbon solutions units.
The upcoming layoffs will further streamline operations within this division as Shell looks towards more profitable areas of operation.
With this shift away from capital-intensive renewable energy sectors, investors will be looking for signs that other companies may follow suit with similar cost-cutting measures.
