Oil giant Royal Dutch Shell has announced it is to cut 6,500 jobs as part of a cost cutting exercise in response to falling oil prices.

The job cuts, which represent seven percent of Shell’s 94,000 workforce, are part of a plan to cut $4bn (£2.5bn) from the company’s operating costs.

The firm also said its investments will be 20% lower this year, at around $30bn (£19bn).

Shell’s quarterly profits for the year to 30 June of $3.4bn (£2.2bn), a 35% decrease compared to the year before.

The decline in profits are a result of reduced oil prices, and Shell said that its cost cutting measures were the company planning for an “oil price downturn [that]could last for several years”

Chief executive Ben van Beurden said:

“We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery.

“We’re taking a prudent approach, pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends for shareholders.”

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