Shell Strikes Massive IT Outsourcing Deal

By Lawrence Walsh  |  Print this article Print


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As crude flirts with the $100 per barrel market, the world's second largest oil company, Shell, will replace more than 3,000 IT professionals with managed services to reduce operating costs and ease downward profit pressure.

More than 3,000 Royal Dutch Shell IT workers are waiting to find out their fates as the European oil giant is expected to announce next week that it will outsource much of its IT operations.

According to published reports, Shell executives decided to slash thousands of IT positions in favor of outsourcing as part of a massive restructuring designed to reduce operating costs by $850 million annually.

Shell did not return calls for comment. However, published reports in European and energy trade press indicated that Shell would begin notifying affected employees of the outsourcing beginning Jan. 8.

Some speculate that the outsourcing transition could be completed by July this year. Reports indicate that leading candidates for all or part of the outsourcing deal include EDS, AT&T, Deutche Telekom's T-Systems.

Shell has made no indication on what functions, applications or infrastructure would be outsourced. Shell remains mum on the issue, but leaked memos indicate 3,200 will be affected. When complete, Shell's internal IT workforce would be reduced to 400. When completed, Shell could become the largest single outsourcing contracts in the energy industry.

Read the full story on Baseline: Shell Strikes Massive IT Outsourcing Deal

Lawrence Walsh Lawrence Walsh is editor of Baseline magazine, overseeing print and online editorial content and the strategic direction of the publication. He is also a regular columnist for Ziff Davis Enterprise's Channel Insider. Mr. Walsh is well versed in IT technology and issues, and he is an expert in IT security technologies and policies, managed services, business intelligence software and IT reseller channels. An award-winning journalist, Mr. Walsh has served as editor of CMP Technology's VARBusiness and GovernmentVAR magazines, and TechTarget's Information Security magazine. He has written hundreds of articles, analyses and commentaries on the development of reseller businesses, the IT marketplace and managed services, as well as information security policy, strategy and technology. Prior to his magazine career, Mr. Walsh was a newspaper editor and reporter, having held editorial positions at the Boston Globe, MetroWest Daily News, Brockton Enterprise and Community Newspaper Company.

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