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   Web Issue 3278 October 14 2008   
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Shell employees fear more job cuts

Fears are growing that oil giant Shell is preparing to shed around 3200 jobs in the latest cost-cutting move by the industry.

The company has told staff that it is planning to outsource "a substantial part" of its IT infrastructure services division, believed to comprise a total of 3600 staff.

Detailed consultations with workers affected start early in the New Year, with a start date for the new arrangements planned for July 1.

The move by the Anglo-Dutch producer follows hundreds of UK jobs cuts and the off-loading of thousands of other worldwide posts at rival oil firm BP.

Details about Shell's move were outlined in an apparent leaked email from the company's vice-president of IT infrastructure, Goh Swee-Chen.

In the message, dated December 19, she said three partners had been selected for the outsourcing deal - EDS, AT&T and T-systems - with contracts expected to be signed in March next year.

Swee Chen told staff: "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."

A series of "Facing Change" meetings for staff have been set up from January 8 to outline the proposals, she added.

The message was sent to the campaigning website royaldutchshell.com, which is occasionally used by Shell staff to air their grievances.

A spokeswoman for Shell refused to comment on the email, but confirmed the outsourcing plans.

One employee who contacted the royaldutchshell.com website said the plan was to retain 400 IT staff at Shell, with the remaining 3200 outsourced. The worker said: "To be fair to Shell we have been aware of the outsourcing for at least six to eight months.

"It was not until very recently, however, that we found out which jobs were mapped to be outsourced, and who is taking over the contracts.

"It is speculated that it still will take at least another six months for the full transition to become complete, given the scale of the project."

One outsourcing expert told the Sunday Telegraph that if 3200 staff were involved in the outsourcing, it would be one of the biggest deals he had heard of.

Shell, which employs about 108,000 worldwide including 3000 at its main UK office in London, has said previously that it wants to cut costs.

The group unveiled third-quarter earnings of $6.39bn (£3.2bn) in October, down 8%. And in an interview with Dutch newspaper de Volkskrant earlier this month, Shell's chief executive, Jeroen Van der Veer, said that production costs had risen 65% in two years.

In October, BP announced plans to cut around 350 jobs at its North Sea headquarters in Aberdeen, and last month also said it was offloading all of its wholly-owned American forecourts and supermarkets in a move that will affect nearly 10,000 US staff.

Shell has said it is also looking at reducing staff numbers in its finance division, as well as combining other departments and operational centres around the world. It is part of a review that has been taking place since 2005 which aims to save the oil producer around $500m a year.


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Posted by: Scamp on 12:49am Mon 31 Dec 07
Two American and one German IT company... Nice to know where Shell's loyalties lie.
Posted by: W Smith, Middle East on 5:21am Mon 31 Dec 07
It was Alastair Locke of Abbot Group who said "when can we get rid of this bloody chancellor?"

He was talking about Mr Brown's change in the tax regime that now claims almost 50% profit from the oil companies through direct and indirect taxation.

The governor of Alaska has just announced tax increases for oil companies. BP, Shell and Chevron responded by holding back plans to expand and invest. So the new jobs that were going to be created are put on hold.

Nothing like shooting yourself in the foot.

Alaska and the North Sea represent some of the most hostile and expenive places in the world to extract oil so its no wonder these companies have had enough of Brown.

Mr Brown refuses to learn the Irish lesson in keeping taxation low enough to keep investors, and jobs, rolling in - so expect more companies to pack up and leave.
Posted by: Steve, Aberdeen on 2:00pm Wed 2 Jan 08
As a Shell employee I can say we've been expecting this for a while. It has to be welcomed as the IT side of things have grown fat and inefficent and do not provide the service technical people like me require.
Posted by: Little old me, North Sea on 1:05pm Thu 3 Jan 08
"As a Shell employee I can say we've been expecting this for a while. It has to be welcomed as the IT side of things have grown fat and inefficent and do not provide the service technical people like me require."

Typical comment from a selfish Shell employee with an I'm all right jack attitude who cares **** all about your life.
Posted by: Steve, Aberdeen on 10:02pm Thu 3 Jan 08
Not selfish at all. I get frustated by the inefficencies of this particular department (almost as bad as the coporate lot selling stuff for a fraction of it's value and all our exploration acerage).
I'm sure you are unaware that our costs per barrel for IT are higher than matainence? That is not due to our historical underspending on maintainence but the hugh overspend on IT - approx 50% higher than comparabe rivals.
Oil companies tend to get the best engineers but settle for second string when it comes to IT, HR and Finance and these people inhibit the engineersin their job.
Posted by: Bob on 3:39am Fri 4 Jan 08
If IT is inefficient now, how would the service be better if the same group of engineers now move to the vendor and provide the same service helps?? Don't you think the people managing IT need to do a better job than just blaming the engineers??
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