TheStarOnline: Shell to cut cost by outsourcing work to Malaysia, India

LONDON (AP) - Royal Dutch/Shell Group of Cos. said Tuesday that it will cut as many as 2,800 jobs in its technology division by the end of 2006.

Shell, the world's third-largest public oil company in terms of market capitalisation, said it expects the cuts to save it US$850 million.

It plans to achieve them, in part, by outsourcing operations to India and Malaysia.

The group said it intends to cut between 1,900 and 2,800 jobs from the 9,300-strong work force in technology over the next few years - cuts that will affect people working for Shell and for its contractors.

A company spokeswoman said the cuts had been under consideration for 18 months to two years and were unconnected to Royal Dutch/Shell's problems over the more than 20 percent overstatement of its proven oil and gas reserves.

The job cuts were part of a business efficiency program that the company had discussed in its last quarterly results, Shell said.

"This is a project that is about developing Shell's IT efficiency and developing a standardized global IT service for all Shell companies through a common infrastructure with fewer applications, which means that it would be supported by fewer people,'' spokeswoman Lisa Givert said. 

"It has been part of our strategy to increase cost efficiency.''

Shell's chairman, its head of exploration and its finance chief have resigned over the overstated reserves.

The Securities and Exchange Commission, the U.S. Justice Department and European regulators are all investigating. – AP

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