Shell Oil Co. to Cut 600-800 IT Jobs, Offshore to India and Malaysia
As part of its efforts to improve quality and reduce costs, Shell Oil Co. is planning to cut 600 to 800 information technology jobs in the United States and outsource most of the work to India and Malaysia. This move is expected to save the company $850 million annually, starting from 2008. The job cuts will be made through attrition, reducing contractors, and offering voluntary severance packages.
Key Takeaways:
- Shell Oil Co. aims to cut 600 to 800 IT jobs in the United States, primarily among temporary staff, to transfer work to low-wage countries.
- The company estimates that the job cuts will result in annual savings of $850 million starting from 2008.
- The reductions will be made through attrition, reducing the number of contractors, reassigning some employees to other jobs, and offering voluntary severance packages.
- Shell currently has a total IT manpower of 9,300 personnel globally, including 2,200 in the United States.
- The company has signed contracts with IBM and Wipro Technologies for IT services from India, reportedly worth $1 billion or more.
- A Dutch IT worker costs Shell $85,000 annually, compared to $20,000 for an Indian IT worker.
- The Royal Dutch-Shell Group of companies is based in Houston and is part of the Royal Dutch-Shell Group of Companies.
- Shell hopes to make the reductions by 2006.
Statistics:
- 9,300: Total IT manpower of Shell worldwide
- 2,200: Number of IT personnel in the United States
- 600-800: Number of IT jobs to be cut in the United States
- $850 million: Annual savings expected from job cuts
- $20,000: Annual cost of an Indian IT worker
- $85,000: Annual cost of a Dutch IT worker
- $1 billion: Estimated value of outsourcing deals with IBM and Wipro Technologies
Sources:
- Asia Pulse, June 9
- PTI, June 9 (no specific date given)
- FNV, conference organized by the federation of Dutch unions (no specific date given)
- Shell Oil Co. (no specific date or source given)