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MarketWatch: Shell to shed thousands of IT, finance jobs to cut costs: report

By Adam Smallman
Last update: 7:32 p.m. EST Dec. 30, 2007

LONDON (MarketWatch) — Royal Dutch Shell is to shed thousands of jobs to cut costs and simplify its structure, and one of the largest-ever outsourcing deals may be struck in the next couple of months, the Daily Telegraph reported late Saturday, citing information published on an anti-Shell Web site.

The biggest change will be in the information technology division, where around 3,600 staff may be affected by a plan to farm out operations to Electronic Data Systems Corp. , U.S.-based wireless telecom services firm AT&T Inc. and Deutsche Telekom AG (DT) unit T-Systems.

At a board meeting thought to have taken place shortly before Christmas, Shell decided to outsource virtually the whole of its IT function. Starting Jan. 8, Shell is planning a series of what it calls Facing Change meetings with staff to outline further details, which will include plans to reorganize other departments, including finance operations.

Dow Jones Newswires, citing a person familiar with the matter, reported on Dec. 24 that Chief Financial Officer Peter Voser told staff he wants “a leaner and meaner” finance function and has started to tighten control of business lines by his department. Shell confirmed then that it was “in discussions to outsource a substantial part of its (information technology) infrastructure to three suppliers,” without naming them.

Shell declined to discuss the number of staff involved, the Telegraph reported, though in an email written by Goh Swee Chen, vice president of Information Technology Infrastructure, the outsourcing plan presented to the board is described as “substantial” and likely to create “uncertainty”. The email was confirmed by Shell as authentic.

Negotiations are continuing, but Shell wants the new IT arrangements up and running by July 1, the newspaper reported.

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