(Adds details, possible IT outsourcing.)
By Benoit Faucon
Of DOW JONES NEWSWIRES
LONDON -(Dow Jones)- Royal Dutch Shell PLC (RDSB.LN) may eliminate a significant number of positions at its finance department in an effort to streamline its organization, a person familiar with the matter said last week.
Separately, Shell also confirmed it was “in discussions to outsource a substantial part of its (information technology) infrastructure to three suppliers.”
Consideration of such moves follows a decision at rival BP PLC (BP) to cut into management layers to improve efficiencies and reduce expenses in October. They show other majors also see a new need to restructure as cost inflation and resource nationalism bites into profits.
A Shell spokesman said the company had already said it is reviewing “ways to create greater synergies by moving existing financial locations to Shell-owned service centers.” But he declined to comment on the possibility of eliminating positions within the finance department.
Shell Chief Financial Officer Peter Voser has told staff he wants “a leaner and meaner” finance function and has also started to tighten control of business lines by his department, the person said.
It isn’t clear if the job cuts would be among staff or contractors, nor whether there could be forced redundancies.
The person said the move could also improve Voser’s credibility to become the next chief executive when current incumbent Jeroen van der Veer leaves in 2009.
On the outsourcing of IT infrastructure, the Shell spokesman said, “We are in the middle of commercial conversations and expect contracts to be signed early in 2008 – at which point we will share more details.”
The talks were first reported on the Web site royaldutchshellplc.com, which is critical of the company. That report said thousands of jobs – among staff or contractors – could be cut as result.
A person familiar with matter said six possible outsourcing suppliers had been selected in October: Electronic Data Systems Corp. (EDS), T-Systems – the business services unit of Deutsche Telekom AG (DTE.XE), AT&T Inc. (T), BT Group PLC (BT), Computer Sciences Corp. (CSC) and Hewlett-Packard Co. (HPQ). It is unclear which are the three finalists.
Company Web site: www.shell.com
-By Benoit Faucon, Dow Jones Newswires; +44-20-7842-9266; benoit.faucon@ dowjones.com -0-
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