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Story URL: http://services.silicon.com/itoutsourcing/0,3800004871,39169536,00.htm

Shell to outsource 3,200 IT jobs
IT infrastructure on the move

By Nick Heath

Published: Wednesday 02 January 2008

Shell is planning to outsource most of its global IT operations in a move that will affect thousands of jobs worldwide.

A-Zs…

♦  Security from A-Z…

♦  Biometrics from A-Z…

♦  Broadband from A-Z…

♦  Wireless from A-Z…

♦  Green IT from A-Z…

The oil multi-national is finalising contracts for AT&T, EDS and T-Systems to run the bulk of its IT infrastructure and cut costs. It has been reported the outsourcing will affect about 3,200 Shell staff and contractors, about 10 per cent of whom are believed to be based in the UK, though Shell will not confirm exact numbers until the contracts have been signed.

An email to staff from the VP of IT infrastructure at Shell, Goh Swee Chen, outlining the outsourcing plans was leaked by a company insider to a Shell protest site. The email discusses the transfer of staff and assets and "new and significantly changed jobs in the new IT infrastructure organisation", but makes no mention of redundancies.

It reveals that contracts are expected to be signed in March, with EDS taking over end user computing services, T-Systems hosting and storage services and AT&T managed network services.

Staff consultation will begin this month, new staff appointments will be announced in February or March and the outsourced departments are hoped to be up and running by July this year.

In the email sent on the 19 December, 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 spokeswoman for Shell told silicon.com: "We have been working on simplifying the organisation and generating efficiencies since at least 2005. Our IT Infrastructure Sourcing Programme was launched to review the feasibility of outsourcing a substantial part of Shell's global IT Infrastructure services to a limited number of key suppliers. We are in the middle of commercial discussions and expect contracts to be signed in 2008, at which point we will share more details."

The oil group has been quoted as saying it plans to make pre-tax cost savings of about $500m per year through streamlining its structure and cutting and outsourcing jobs. Shell employs about 108,000 people worldwide.