Royal Dutch Shell Plc has announced that it is cutting 10,000 jobs as it reported an 87 per cent drop in annual profits in 2015 amid the ongoing decline in crude oil prices. The company’s income fell to $1.94 billion in 2015 from $14.88bn last year.

Shell’s fourth-quarter profit, adjusted for changes in the value of inventories and one-time items, dropped to $1.83bn, down by 44 per cent from the $3.26bn it recorded during the same period in 2014. These low figures come barely a week after the company won shareholder approval for a $50bn takeover of rival BG Group in the largest deal the oil industry has seen in a decade. Shell, which cut operating costs by $4bn, plans to further reduce capital spending by $3bn in 2016, apart from job losses.

“We are making substantial changes in the company, reorganising our upstream (exploration and production) and reducing costs and capital investment, as we refocus Shell and respond to lower oil prices. As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies,” Ben van Beurden, the CEO of Shell, said in a statement.

“Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that,” he added.

However, the CEO said the completion of the BG transaction “marks the start of a new chapter in Shell, rejuvenating the company and improving shareholder returns.” He expects that it will be finished “in a matter of weeks”.

Earlier this week, Standard & Poor’s cut down its debt rating for Shell to the lowest level since the rating agency began coverage in 1990.