Most jobs lost will be in middle management, but people will also be made redundant in the department that explores new oil and gas fields. The job cuts come on top of 500 layoffs among senior management earlier this year. Around 15,000 employees will also be forced to apply to keep their jobs, and cuts among the rank and file are possible in 2010, Henry said. Shell employed 102,000 people at the end of 2008.

The cuts come as no surprise. Shell lost 50 percent of its revenues compared the summer of last year, as a result of plummeting oil and gas prices. The company is sticking to its heavy investment program and dividend policy. These have let to soaring debt which Shell is trying to control by laying people off and reducing other costs.

The company's profits were down 68 percent in the first nine months, to 8.6 billion euros. Gearing (the ratio between debt and equity finance) is up to 14 percent, from 6 a year ago. Henry said he expects this to by 20 percent by the end of the year.

Henry said the company is not expecting a swift economic recovery. "In Europe there are few if any signs of demand recovering...in the United States if anything there's some bottoming, improvement in one or twosubsectors but not yet firm enough to call a recovery," he said.

Analysts noted that Shell appeared to be behind the curve in restructuring for the downturn compared to its main European rival BP, which reported strong earnings this week, and ExxonMobil of the US, which reports earnings later Thursday.

Shell pumped 2.93 million barrels of oil per day in the third quarter, flat from a year ago and up slightly from the second quarter. Shell has invested heavily in new production to reverse a decade-long declining trend, and has vowed production increases by next year.

Shell sold oil at 63 US dollars per barrel in the third quarter from 111 dollars a year ago. Henry said the recent recovery in oil prices to around 78 dollar per barrel is speculative. "Fundamentally we don't see demand turning yet and there's plenty of supply available," he said. "So while I might see reasons why the prices might be higher, I simply can't plan a balance sheet" on the assumption that they will remain at current levels, he said.