Shell to cut 2,800 technology jobs from global workforce

28 Apr 2004

Troubled oil giant Shell said today that it plans to axe up to 2,800 technology jobs – approximately 30pc of its total technology workforce over the next three years. The company, which has been under major pressure after cutting its reserve estimates by 20pc, said it is considering moving much of its technology operations to Malaysia and India.

The division affected by the decision has sites in the UK, the Netherlands and the US, and the decision is claimed by the company to be about developing Shell’s overall IT efficiency.

The company claimed the decision had little to do with a recent controversy over how it accounted for its proven oil reserves, which resulted in a management reshuffle at Shell.

In recent weeks, Shell’s chairman, its head of exploration and its chief financial officer were forced to resign following revelations that proven reserves of crude oil had been exaggerated. It is alleged that Shell executives knowingly hid the company’s oil and gas shortfalls as far back as 2001. Shell is now under investigation by the US Security and Exchanges Commission, the UK’s financial watchdog FSA as well as the US Justice Department.

The decision to restructure its technology division would result in cost cutting to the tune of US$850m by 2008.

According to reports, Shell has signed outsourcing agreements with two IT vendors in India, IBM and Wipro. Shell also has 1,000 workers in Malaysia in an IT support centre. It has also been reported that a reorganisation of Shell will result in the development of a standardised global IT system for all Shell companies.

By John Kennedy