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Shell's IT department off to India
Offshore dole exploration
Exclusive Oil giant Shell is looking to offshore almost 3,000 IT jobs, according to internal documents seen by The Register.
Central services at Shell have been rebranded Group IT Infrastructure (GITI), although this is known internally as "Give IT to India". Almost one third of jobs in the IT department could go abroad. The cost-saving project, dubbed ITVision, is being overseen by CIO and ex-HP man Mike Rose.
Staff are deeply unhappy at the proposed changes and question if the new structure will meet Shell's IT requirements. The troubled oil giant is looking to save $850m per year by sending jobs overseas.
A spokesman for Shell told The Register: "The figures you have are right. The project has been running for some time and is now moving from planning to implementation. We are committed to keeping some IT function in the UK, US, Netherlands and Malaysia. We are in the process of talking to staff and it is too early to be definitive about where the jobs will go."
He would not be drawn as to where the job losses will come from, because it is too early to say - the target headcount figure is for the end of 2006.
Jobs are likely to go to India, Malaysia and China. The company is believed to be in detailed talks with Infosys.The company is also trying to reduce the number of applications it uses and to standardise on shrink-wrapped items. Shell already has a centralised IT outpost in Cyberjaya in Malaysia which employs 1,000 staff.
The latest memo from ITVision asks bluntly "how many jobs will be impacted?" and "Do we have IT jobs in the future, and is there a career path for me?"
It also shows what the project aims to achieve: "World-class price performance in everything we do by 2008 Circa $850m per annum like-for-like cost savings achieved through: - Streamlined decision making (Governance) with 'Business at the Centre' - Applications rationalisation - Infrastructure consolidation and rationalisation - Procurement leverage and demand management - Locating more work in cost-advantaged locations where there are talented IT professionals, i.e. Malaysia and India."
The memo says Shell expects to cut between 1,900 and 2,800 jobs from its total IT staff of 9,300 - a reduction of 20 to 30 per cent. Most of these losses are expected in high-cost locations such US and the UK.
Shell began cutting jobs in its exploration division last month - it is looking to lose over 4,300 people. It announced a 20 per cent cut in rig workers on the North Sea, a decision which unions condemned as dangerous. Shell is also looking to cut its headcount in Nigeria by 20 per cent.
Shell was recently caught overstating the size of its available oil reserves, a decision which cost the jobs of three boardroom execs. It is under investigation from the Financial Services Authority. ®