London, England -- Royal Dutch Shell said on Thursday that a total of 5,000 staff would be leaving the Anglo-Dutch oil and gas group as part of a restructuring begun earlier this year.
It gave the update on job losses as it announced a decline in third-quarter profit that was a little smaller than analysts had, on average, expected.
The drop in crude oil and natural gas prices from their peaks in 2008 has forced energy companies such as Shell and BP to cut costs in order to maintain capital expenditure and dividends.
The job losses announced on Thursday are part of a restructuring program called Transition 2009, which was put in place by Peter Voser, who formally started as chief executive at the beginning of July.
Shell said in July that it had begun the restructuring by cutting 20 percent of its top managers, reducing their number by 150 to 600.
In the next stage of the process, Shell said on Thursday that it was thinning staffing in less senior roles, which would take the total job losses from Transition 2009 to 5,000. Shell employs about 100,000 people.
The restructuring program is due to be finished by the end of this year and the job losses will require the company to take an as-yet-unspecified charge likely to total several hundred million dollars in the fourth quarter.
Shell said third-quarter profit declined 73 percent to $2.99 billion on a current cost of supplies basis, a closely watched post-tax measure that removes the effect of price changes on inventories.
Stripping out one-off and non-cash items, underlying CCS profit was $2.62B, better than the average forecast of $2.55B produced by a Reuters poll of eight analysts. Earlier in the week, BP and BG had also reported quarterly figures that were less bad than expected.
"We see some indications that energy demand and pricing are improving, but the outlook remains very uncertain and we are not expecting a quick recovery," Mr Voser said in a statement.
The decline in oil and gas prices had a big effect on Shell's upstream division, which saw profits fall 82 percent to $1.54B as oil and gas production fell marginally from 2.931M barrels of oil equivalent per day to 2.926M.
In a conference call on Thursday, Simon Henry, Shell chief financial officer, said that the company did not see the demand for oil and gas rebounding yet, even though prices had rallied recently.
Across the group, Shell said annualised operating cost savings for the first nine months of the year had grown to $1B, excluding the impact of exchange rate movements and non-cash pension costs.
The quarterly dividend has been set at $0.42, an increase of 5 percent. Mr Henry said it remained possible that the dividend might be frozen in 2010.
He also said that the group's gearing at the end of the year was likely to be less than it had expected because the rally in equity markets had reduced anticipated pension fund contributions.
Shell's London-listed B shares had fallen fiour percent to £18.00 ($29.80) in late morning trading on Thursday.
© The Financial Times Limited 2009
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