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Comment by a Shell pensioner on IT job cuts

January 3rd, 2008 05:46

This is the third attempt to outsource the core IT function of Shell in the past 15 years. I worked in that division for 25 years and the first two attempts to do this, back in the 1990’s were both abandoned for good reasons – outsourcing results in short term savings (usually due to initial subsidies provided by the contractor) but in the long term costs escalate. In my experience outsourcing companies cannot create savings large enough to pay for the profits they need to take, and they are very skilful at slowly raising their charges after they have won the contract. Outsourcing also results in lower flexibility of the IT division to help the business develop. As IT is now (wrongly) seen by Shell as a commodity this argument no longer stands. Sadly Shell has always been trailing edge as far as using IT goes, not because of the quality of the IT staff but because of the quality of business management, who in my time tried to stamp out the use of email and ridiculed the Internet as a toy that adolescents play games on.

As a Shell pensioner I hope the company remains solvent far into the future, but there seems to be an endemic incompetence at the top which has overseen the selling off of valuable assets for peanuts (Billiton and the Cairn field in India spring to mind), fraudulent behaviour (Phil Watts and the missing reserves), failure to take the environment seriously (poor management of the Brent Spar incident and the Sahkalin project which rests on keeping 50 breeding pairs of blue whales alive), and a deterioration in its ability to deal with non-western governments that don’t play “by the rules” i.e. Nigeria and Russia.

I look back at my time with Shell with mixed feelings. As Jimmy Carr, the British comedian and ex-Shell employee, once said “some very nice people work for Shell”. But it could have been a truly great company and a positive dynamo for the world economy as well as a beacon of good practice, but instead it tried to hang onto the past, and arrogant senior managers made some very bad decisions and as a result it has slowly slid down the FTSE into a danger zone where it has become a take over target. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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