Shell to move 800 tech jobs to India, Malaysia

In order to improve quality and save $850 million annually beginning in 2008, Shell Oil Co is cutting 600 to 800 information-technology jobs in the United States and offshoring most of these jobs to India and Malaysia.

"It's about reducing cost and improving quality," said Anne Knisely, manager of corporate media relations for Shell Oil Co, a Houston-based firm and part of the Royal Dutch/Shell Group.

Shell hopes to make the reductions by 2006. The job cuts will be made through attrition, reducing the number of contractors, reassigning some employees to other jobs and offering voluntary severance packages.

A spokesperson for Shell, for example, told a conference organized recently by FNV, a federation of Dutch unions, that its company's computer programmers do not work as well as those in India, and sees offshoring as a solution.

Currently, Shell has a total IT manpower of 9,300 personnel globally, including 2,200 in the United States. Most of the domestic IT jobs are in Houston.

This cutback will be mostly among temporary staff, whose work will be transferred to low-wage countries. A Dutch IT worker costs the company $85,000 annually, versus $20,000 dollars for an Indian one.