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Shell transferring thousands of jobs to India, Philippines

Economic Times Business

17 Dec 2009, 1110 hrs IST, PTI

HOUSTON: In order to reduce costs, global oil major Royal Dutch Shell will soon transfer additional office jobs from Houston and elsewhere to India and the Philippines. Shell has also announced that it would slash 5,000 jobs by year-end , including hundreds in Houston as part of a sweeping reorganisation new CEO Peter Voser said is needed to make the company more competitive.

According to internal Shell documents, the European oil giant has been transferring additional office jobs from Houston and elsewhere to India and the Philippines to reduce costs. The migration programmes affect employees in finance and other support functions, which are being consolidated in shared service centres in low-cost countries to fit the new company structure.

It’s unclear how many of Shell’s 13,000 employees in Houston will be affected by the migration plans. Partly, that’s because company officials are still deciding which jobs will stay or go abroad, and are rolling out the plans in phases that run into next year. But at least a few divisions in Houston are preparing to be downsized dramatically.

Major oil companies including Shell, ConocoPhillips and BP have been cutting jobs, capital spending budgets and other costs in response to the global economic downturn that has sapped demand for petroleum products like gasoline and diesel fuel. But Shell’s migration programmes could have broader implications for Houston .

Shell, which is based in The Hague, with US headquarters in Houston, has been involved in a major downsizing since Voser replaced Jeroen van der Veer as CEO in July. By year end, the company plans to cut 5,000 employees, or 10% of its global workforce, under a reorganisation he calls Transition 2009.

The process which merged the company’s three upstream businesses into two, expanded its downstream group and added a new projects and technology division trimmed management ranks by 20% and has forced 15,000 Shell employees to reapply for a smaller pool of jobs.

The company recently told employees within its finance division that some of their jobs are being relocated from Houston and Calgary, Alberta, to finance operations centre in Manila and Chennai. Spokesman Bill Tanner said foreign shared service centres are key to improving the finance unit’s competitiveness.

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