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Shell expected to slash 3,200 IT jobs

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Oil firm 'loath' to confirm number

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Oil giant Royal Dutch Shell has told its staff that it plans to make more than 3,000 job cuts.

According to a leaked memo to its staff from Shell's vice president of IT infrastructure Goh Swee Chen, the firm has been in talks with outsourcing outfits EDS, AT&T and T-systems, and said that contracts were expected to be inked in March.

She told Shell employees: "I acknowledge that there will still be uncertainty as we are working through the finalisation of contracts, open resourcing and transition preparations. I encourage you to keep an open mind and take the time to learn more about the suppliers as employers and as business partners."

The Register broke the story that Shell planned to offshore thousands of jobs in 2004.

We reported that almost 3,000 jobs in the firm's IT department could go abroad as part of Shell's cost-saving project, dubbed ITVision.

A Shell spokeswoman told us today that she was unable to comment on whether the cuts cited today were in addition to 2004's job cull.

She said that the Anglo-Dutch firm, as part of its $850m per annum like-for-like cost savings Infrastructure Sourcing Program (ISP) that first kicked off a few years ago, was continuing to look at ways of tightening the belt.

Shell had intended to reduce its headcount by 3,000 by the end of 2006. This suggests that the memo, which was published on anti-Shell website Royaldutchshellplc.com, in fact points to a new round of job cuts.

When pushed on whether or not Shell could provide a definitive figure on how many of its workers could be affected by the cuts, the spokeswoman said: "I can't confirm the number and I'm loath to comment on any number."

Royaldutchshellplc.com reckoned that around 3,200 jobs looked set to be outsourced, and that staff can expect to find out their fate in letters from the firm at some point this month. ®

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Latest Comments
Anonymous Coward

Ah the joys

As someone who has been through the mill, albeit with a bank rather than an oil-giant, I can only too happily confirm the stories about what is lost of which foremost is the goodwill of the staff being sold on (or is that TUPE'd).

To make matters worse, IT was not even all outsourced to one company and so what little there was that did continue working soon became unusable as routine work on kit and normal lifetime upgrades became subject to a 'whose turn is it to make the bucks' fight.

After a couple of years we were all bought back with exactly the same justification used as when we were sold.

Go figure

Anon from shame as given the chance to jump and run I whimped out.

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Anonymous Coward

Question for "Welcome my new corporate overlord"

In response to "let me clear up the popular misconception"

Did you never notice the style of deal where an outsourcing giant will swallow up staff, run the operations for 6 months from the UK then claim that no money can be made so the work should be shipped oversea's to an army of waiting Engineers?

I'll say your right, on day 1 of the new deal most people will still be in the UK, just don't assume the same on day 180 or day 365.

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Oh, for a New Gusher/Virgin Well.

"Internally, most people think it's a bad idea to outsource core IT because it is in fact core business on the Exploration and Production side. It's just the higher-ups who want to seem proactive."

I would agree that it is a bad idea, AC, but with no one higher-up with any new ideas, what else to do? Looking busy rearranging deck-chairs/training native proxies doesn't look so bad whenever there is nothing in the pipeline/the store cupboard is empty/the boss is compromised/the fiddle exposed/the natives are restless.

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Anonymous Coward

so wrong ?

...it's startling that here we are, many of us confessing to earning our a money by structuring or delivering outsourcing deals, yet largely acknowledging that this type of deal is wrong ethically, professionally, practically and technically.

...and yet, as one commenter put it, "Senior Management appear to be addressing costs". - and they plow on, learning nothing from repeated failure and pain of the effort.

We, the few charged with delivering these broken solutions, know full well that true costs with be far higher than than any saving shown on the bottom line.

But it's not a new story - but an old one with a technical twist.

I read somewhere, that the 1st thing you should, upon reaching a senior management type position - is to declare a 5 year strategy to do something or the other...doesn't matter what....but introduce it with a fanfare, fully confident in its success, knowing full well you and many other won't be around in 5 years time in any case - having been catapulted up the ladder by your wonderful strategy.

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I, for one, welcome my new corporate overlord..

As a long term contractor who will stay here during the transition, I'm not particularly worried..

I'd like to clear up one popular misconception, though.. Outsourcing is different to offshoring, in that (for the most part) people who work for or contract to Shell the day before the outsourcing goes through will still have a job/contract the day after, only with a different company. There is some restructuring and job shifting, but employees (at least in the Netherlands) are being taken care of. I hear some other countries, with less employee protection, won't be so lucky. Overall there is a much reduced IT budget for 2008, which has additionally caused hiring to slow down, and people to seek employment elsewhere.

Most contractors in my area don't give a damn, as we're here for the money and the experience, and our knowledge can't be replaced overnight. If we feel our contracts are at risk or the work environment is less interesting or desirable, we will move to the next contract.. nobody need terminate us. :-)

A big problem comes largely with employees, who wanted to work for Shell and now feel betrayed. Many are leaving of their own free will, or joining other parts of the company whenever they have the opportunity. This is where the problem lies, because it is usually the most valuable employees who leave first.

Internally, most people think it's a bad idea to outsource core IT because it is in fact core business on the Exploration and Production side. It's just the higher-ups who want to seem proactive. Things will go smoothly for a while, until the new corporate overlords drive off enough good people, then in 5 years, the rest of the company will have had enough, and we'll in-source again... or (depending on the contracts) the divisions will start building up their own specialist IT teams well before then (leading again to fragmentation and incompatibility, which is what Global IT services were working to eliminate).

Shell's IT company/division is smart enough, at least, to keep some of the talent inside the company, but whether the division of labor between Shell and the new companies will keep inquiring minds satisfied enough to stick around is another question. On the bright side, some of the new firms might get fresh talent from the Shell people. :-)

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