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By | Kelly Fiveash 19th March 2008 13:35

Shell says still 'undecided' on massive offshoring plan

Outsourcing document full of ifs

Royal Dutch Shell left both staff and potential suppliers on tenterhooks yesterday when it dished out details of its outsourcing programme to UK-based IT workers.

As we reported in January, suppliers in the frame for the deal include EDS, AT&T and T-systems, all of whom have been in talks with Shell over the past few months.

However, although the Anglo-Dutch firm goes into some detail in the document about what workers can expect to happen when the company offshores some or all of its IT infrastructure to a supplier, or suppliers, it remains vague on numbers and dates, and indeed on how much of its operation it actually intends to outsource.

That’s despite the fact that a leaked internal memo to staff from Shell's IT infrastructure veep Goh Swee Chen at the start of the year revealed that up to 3,200 UK tech jobs at the oil giant could be axed or relocated elsewhere. She also said that new supplier contracts were expected to be inked this month.

But the latest document to staff seems to suggest that the firm remains locked in negotiations with suppliers, with no clear sign of when contracts will be signed.

“At this stage it has not yet been decided if Shell will actually outsource all or part of its global IT infrastructure activities, if so who the supplier(s) will be and how the outsourcing will be structured,” reads the document. “However, if the outsourcing is to be implemented it will undoubtedly have an impact on the employees working in the relevant part of the IT infrastructure activities in the UK.”

Shell said that, under contracts agreed with a supplier, or suppliers, voluntary redundancy would not be offered and that instead, employees whose positions are identified as unnecessary prior to any transfer will receive a preliminary warning of three months.

“If employees remain unplaced at the end of the preliminary warning period of potential redundancy, they will be given individual written notice of termination of employment,” said Shell.

The oil giant also outlined what it hopes will happen when the unspecified number of IT workers get shunted over to a new supplier. It said that any staff transferred over should be offered a comparable remuneration package including some form of performance-related bonus.

Shell, which reported record full-year earnings of £13.9bn in February, told Unite last month that it hoped to reduce costs by £250m by outsourcing its global IT infrastructure business. But union reps reacted angrily to the firms’ plans, with Unite regional officer Graham Tran accusing some of Shell’s Aberdeen-based execs of “arrogant behaviour”.

Tran told El Reg that “the latest document makes interesting reading”, and added that “at least some progress is being made in so far as making additional payments to the staff affected”.

We asked Shell to provide comment, but it’s yet to return our call. ®

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