Royal Dutch Shell has reportedly told its UK-based IT contractors they will be asked to quit if they fail to accept a 12 per cent pay cut.

According to Contractor UK, the multinational company wrote to its IT contractors last month, informing them of its plan to slash rates as part of a cost-cutting exercise.

The Register asked Shell to comment on the story. However, at time of writing, it had not got back to us.

The company underwent a massive overhaul of its IT and telecoms divisions in January last year, when Shell told staff that it planned to let go of around 3,000 people in the UK, US, Netherlands and Malaysia, of which about 1,000 were contractors.

By April 2008, Shell had set adrift most of its IT staff after it inked three outsourcing deals - worth $4.2bn over five years - to spin out its IT and telecoms operations to EDS, AT&T and T-Systems.

In recent months IT contractors in many UK-based firms have faced similar ultimatums over cuts in their pay rates, as companies have taken the opportunity to slash budgets in these economically glum times. ®

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