Union representatives for Royal Dutch Shell's IT workers demanded talks with the firm's top management yesterday over the outsourcing of up to 3,000 jobs at the oil giant. The call came as Shell reported full-year earnings of £13.9bn – the biggest ever profit for a British company. The numbers prompted outrage amongst workers …
Because with only a £14billion profit they really need those £250million in savings. Doesn't matter who suffers because it's the company and the shareholders that matter.
Advice to graduates
Stay well clear of IT. There is no future in it in the UK as clearly demonstrated by Shell.
It's a company making money, not a charity - get over it.
I am disgusted that this story
doesn't have any "shelling out" puns.
Guys, this is embarrassing, we're making far too much money...
...so let's throw most of it away by employing EDS!
Strikes are the least of their worries...
... if they're planning on outsourcing to EDS. What next, TCS?
They'll be really stuck when they need people back in 3 years but they've all gone and found jobs where they are appreciated.
Don't go into IT
There's less money in it than ever, and your job security is about as much as Kevin Keegan's at NUFC (for the british readers) or Marty Schottenheimer after the "Marty Ball" fiasco of last year (for the americans among us).
I can't believe i'm actually considering changing jobs. I'd have more security working for Mc D's than working in IT.
> just about enough does to keep us quiet, and that's what Shell should be doing
Well put! Enough to keep you quiet, and to keep you doing your bit, which is to play your part in helping your employer generate such fantastic profits.
Although there is a real-world legal responsibility for corporations to attend to the needs of shareholders above all else (another conversation there entirely), there is something quite distasteful in treating people like this and, if companies don't see their part in the bigger picture, lay-offs and worries about job security will only add to the growing fears of a financial downturn (after all, if you're not earning -- or are worried about not earning -- enough, you're less likely to spend, spend, spend) and they'll see their share prices drop in the resulting recession.
Maybe they're worried about running out of oil and not being able to pay anybody anything in a few years...
Well having worked at a bank where EDS in with a major oursourcing deal. I reassure the workers there than any similar deal will resolve the problem of Shell making too much profit.
EDS seem to have a, shall we call it "protection-racket" business plan where they yank your servers out to a remote data centre under their control, give you appalling service and then suggest your need to hire "a consultant" from then, it might help solve the problem.
That's the only word for Shell. Here in Aberdeen they're constantly cutting jobs and "streamlining" then they come out with this. They're the embodiment of the Capitalist Pig culture, lining shareholders pockets while screwing everyone else. The govt won't give a fuck cos they're pockets are being lined as well, whether through excessive tax or from backhanders from their scum mason friends in the industry.
A bit ironic really
give that much of the rest of the company is, um, offshore
Mines the sou'wester then
"the biggest ever profit for a 'British company'"
That's an unusual way to describe a multinational corporation with it's headquarters in Holland.
"But they're not telling us anything and are instead busy lining the pockets of shareholders."
Yep, but if we were to kill the bastards it would be us in the dock. Fucking legalised crime.
Once again, fat pig b@stard shareholders get richer, while the people who actually make the company money are shafted.
Business attempts to increase profits shocker
I've got nothing against the principle of outsourcing when it makes good business sense. The real problem is that all too often it's done with a major drop in quality of service (although not always ...). We outsource some of our support roles to South Africa - great idea in principle except that now many are being pulled back here after it was realised that they were a bunch of lazy useless bastards.
The government doesn't like IT, never has, never will.
The government will never like IT because young people earn more than management. Management can't abide this situation.
Also, it hates being in the position that small numbers of people earn loads of money, as poor people vote them out.
They'd much prefer it, if they could make IT like bricklaying.
However, wouldn't it be a laugh if IT people went on strike? How quickly would the country stop? No powerstations, no petrol, no telly, and so on.
This is why the government has to keep IT people earning a bit more than everyone else.
Overinflated opinion of themselves
Firstly, I want to say, I've worked in IT for over 15 years. Yet, it is clear from these comments that a lot of people in IT have a very over-rated opinion of themselves. If you think that 3000 IT workers had anything more than a mediocre affect on the profits of Shell then you are sadly deluded. The key reason Shell made so much money was because of extraordinarily high oil prices. Prices that will almost certainly dip if the situation in the Middle East stabilises at all. Shell have to keep the pressure on costs to make sure they are profitable if oil prices fall by any margin, or if there is any significant interruption to supply from their oil fields - both of which are pretty likely.
Coming from someone with a working class background, I think that modern unions do far more damage than anything else. No-one has a right to a job. You get paid by someone if they think that their outlay on you is worth it compared to the money you directly or indirectly make. As soon as that equation doesn't reasonably balance then you should look elsewhere. If the IT staff at Shell are as skilled as they claim they are, then they should have no problem finding alternative jobs. Or maybe they have forgotten that the vast majority of IT these days is boilerplate work - something you can train a new person to do without too much effort.
Get a grip.
I can't wait till all their systems go to pot and they have to bring it all back again!
"That's an unusual way to describe a multinational corporation with it's headquarters in Holland."
Multi-national yes, hq no. Shell lists on FTSE and it's business HQ is in the UK.
@over inflated opinion
'Shell have to keep the pressure on costs to make sure they are profitable if oil prices fall by any margin'
did you not read the article. £13.9 BILLION in profit. That is pure profit, not revenue so all salaries, expenditure, taxes, EVERYTHING has been taken into account. That's more than the national product of some small countries. What are they going to do with all that money that makes saving £250mill worthwhile? Are they going to sink it all into developing clean technologies? NO, they will invest some but a long way away from all. It will go to the rich shareholders or sit in the bank earning interest everyday, making them yet more money that will not end up doing anything useful. How far do you think the company would have to sink before it became unprofitable?
That isn't the issue, what is a stake is thousands of peoples livelihoods being threatened to make a few savings, and when you compare £14bil to £250mil, it is only a small saving.
As for your comment of 'If the IT staff at Shell are as skilled as they claim they are, then they should have no problem finding alternative jobs' what utter bollocks. Have you any idea how things work. Fewer jobs means more skilled people apply for them. So many in fact that a lot of CVs get overlooked as there are too many to process. More people willing to do the job means companies have greater leverage in terms of dictating salary, so the amount you can earn goes down. Why would a company like shell who are obviously only interested in profits, not the people who allow them to make such obscene amounts of money, want to pay someone highly trained with 10 years in the business what they are worth if they can point to a new graduate and see instant savings of £10-20k in what they pay as a salary?
I have no doubt that you would change your tune once all this outsourcing starts to affect you directly and you are faced with submitting application after application only to never receive an interview because you are viewed as 'too expensive'
I too come from a working class background, and I can see the benefits the unions have brought. Before the unions, employers could dictate everything to you, working hours (70+ per week), no sick pay even if you are off because of something that happened at work, no overtime, no complaints procedure because if you do you get fired, no increases based on extra training or adding responsibilities to your workload, It goes on and on.
You sanctimonious prick
what a shocker!
how unusual, and shell are normaly so 'ethical'
I'd advise any workers who's jobs are being outsourced all work together to build a giant undersea cable cutting machine!
@Anonymous Coward - re. Overinflated opinion of themselves
Nice that you're too much of a coward to reveal yourself. That takes courage.
Whether 3000 IT workers at Shell deserve more money or not, we'll never know - unless you or I work in IT in Shell. For all you know, they could actually be getting paid peanuts, while their company rakes in profits.
As for the affect 3000 striking IT people would have, if you think it would be minor then you obviously don't work in IT and have revealed yourself for the Anonymous Fool you really are. Businesses are built around IT, if you hadn't realised, and if a critical mass were to strike, business would cease within Shell. I know - if one of my customer's single systems goes down, they're on the phone to me quoting lost business at a rate of many thousands an hour, increasing exponentially.
This is why IT people are (or should be) well paid.
A Shell is an interesting Amazing Cloak of many colours
"Multi-national yes, hq no. Shell lists on FTSE and it's business HQ is in the UK."
Fortunately their Business Intelligence isn't UK based though. That would be far too parochial.
Not taking most of that flamebait :)
"Or maybe they have forgotten that the vast majority of IT these days is boilerplate work - something you can train a new person to do without too much effort."
And therein lies the problem, there is a belief prevalent , even among those who really ought to know better, that IT can be reduced to this. And in fairness, there *ought* to be a certain amount of stuff that can be dumbed down far enough for this to be true, at which point you can start farming your tedious day to day tasks, like ad-hoc MIS reporting and suchlike, out to your users, where it properly belongs.
But in order to get to that point, you really do need to people in your org who know what they are up to. That means proper training and experience.
Proper training, in whatever form, costs money, and creates people with a high value to the org, value which they rightly expect to see reflected in their pay packet.. Experience means keeping people in house with skills and the domain specific knowledge that is so important to any large org. That means loyalty, which means making people *feel* valued (e.g by paying them lots of money), or hiring experienced people, who are justifiably more expensive.
I agree entirely that there are far to many people in IT, especially in our benighted isles, who overrate themselves by quite a considerable margin (Web developers, I'm particularly looking at you), but then again, try running an org of any size without them.
You might think it's easy, after all businesses survived with nothing more than paper and ink for many hundreds of years, but now all your mission critical information is stored inside computers, which are complex, and therefore liable to behave, and fail, in mysterious ways which are entirely opaque to people without specialist knowledge.
For this reason alone, good, competent, IT people are worth their weight in gold. But much like plumbers, you only see them when things start to smell bad. Which will be soon, if you lose all your talent.
@Overinflated opinion of themselves AC
You obviously haven't worked for much of your 15 IT years in the oil industry. If you think that shell, or any other oil company, can operate without IT you are sorely mistake. They need to model their oil fields, in order to be able to design the pipelines so that they don't end up with loads of wax clogging them up, or the gas separating out of the crude etc. etc. All of this (as we as Chemists/Physicists/Engineers) takes a hell of a lot of processing power and storage. There is also the development of renewables that goes on in most (non-American) oil companies, lots of simulations etc. going on here.
Take the IT out of most companies, oil included and they are fucked. Yes, the oil companies will have made a lot of money from the high price of oil, but that price also (to a fair extent) reflects the cost of extraction and transportation. It is a lot more expensive to get oil out a warzone than Russia for example (politics notwithstanding.)
While you may not have the right to have a job dished out to you, you certainly have a right to be treated in a fair manner by your current employer, unions are a great help with this as who is going to bother to listen to an individual who objects to being sacked because of an outsource? This is the whole reason that unions exist. It is very rare to see the 70s style militant union outside of local government and the RMT these days. Unions are why most private sector employees don't get below inflation pay rises most of the time.
Your argument that if the IT guys at Shell are skilled enough they should be able to get other jobs doesn't stand up either, because most deals like this involve moving jobs offshore, there are therefore less jobs to go round and while some IT work is easy and anyone can do it you only need to specialise a bit and then you remarkably reduce the amount of people capable of doing a job. Helldesk would be a good example here compare a company helldesk with skilled staff, usually in the UK, and one with script readers, usually in India, which one gives more value for money? I'd go with the skilled one every time.
"the biggest ever profit for a 'British company'"
Nice to know that little dust up in the middle east wasn't all about oil. It would be really terrible if hundreds of thousands of people had lost their lives so some fat ugly share holders (and IT workers with out any moral back bone) could get even fatter.
@ The Other Steve
IT must become a boilerplate industry if it is truly to thrive. IT's too complicated with too many ways to arrive at the same end. IT must evolve to the simplicity of a toaster or spanner wrench and high cost specialists must go.
What makes you think these people were actually a benefit to the company? If it's possible to outsource exactly the same activity to cheaper labour then the original employees were either over-paid or not putting their full effort into their jobs. Welcome to real life - you don't deserve a job, you earn it.
so let me get this straight, companies like this make their money from selling their products in the UK. Then they gradually move over their workforce to employ people from other countries(where presumably they don't sell any products), thereby creating unemployment and reducing the spending power of people in the country where they make their profits?
Does this even remotely make sense? If enough companies did this, then they would all collectively be shooting themselves in the foot(feet rather) and end up making no profits at all. But then of course, big shit companies don't employ this kind of real world rational do they? No, as far as they're concerned, other companies will employ and ensure that their consumers have money to spend, and perhaps a government or two will throw in tax payer money in the form of subsidies (again ironically tax money comes from EMPLOYED workers), and then they can skim a little more profit in the short term, not realizing that ultimately they're dooming themselves, and the whole country in the future.
Socialist rant over, I'd like to clarify that I come from a 3rd world country where presumably we would benefit from outsourcing, but I believe that this is just not fair. A company should be obligated to invest in its country of origin and contribute to it's economy, not suck it dry and rake in the profits for itself and a few greedy shareholders and corporate poofs.
phew that was long.....mine's the one with bad motherfucker on it............
.....Meanwile back in the states.......
If it weren't for multi-millionaire CEOs and crooked, insensitive business deals the politicos wouldn't have jobs. Menial laborers like engineers, programmers, DBAs, etc are a dime a dozen......oh, wait.....I could sewar that was the last quote on the commodities exchange........
Anyhow more power to their union.....private sector IT workers over here generally aren't even "allowed" to unionize. Really doesn't matter.....their jobs get sent overseas anyhow.
What is wrong here?
If I'm not mistaken, in a capitalist market
When the cost of your raw material, in this case crude oil.
When the cost of manufacturing has gone up.
- If the oil monopoly is to be believed its due to demand and accidents which may be partially true but the oil trust has not put any money into infrastructure in 20 years.
Profits are supposed to go down, not up.
Can the demand for crude for making plastic be that strong from China?
If you don't like it, fook off to India
Go and live in Hyderabad or Bangalore, India is the fastest growing economy and has that 1980's atmosphere, optimism and decor.
Cry me a river.
I work in IT. I have no business dealings with Shell other than occasionally purchasing their fuel.
That said, I'm sick of (some of) you people whining about Shell making a profit. If you dislike their business practices don't invest in their shares and don't purchase their product(s) but don't whine about a business making money for it's shareholders. That's what a business is supposed to do. ANY business you'd care to name.
As for the stuff about moving jobs offshore, well that's the way it goes. Unless I've been completely misinformed, an employee and employer BOTH agree to an employment contract at the commencement of the employment period. It's a bit rich for the employee(s) or their union to come along later and complain about Shell exercising their rights in accordance with said contract.
If it turns out that Shell has acted outside the terms of the employment contract negotiated with it's employees, then by all means sue the pants off them. If however they are acting within the terms of the employment contract then the employees who are complaining should STFU and read the contract more carefully the next time they apply to work for somebody.
EDS or not EDS that is the question
Ask companies who have punted that shit show out of their environment how much money they saved by bringing it back in house. We did it 6 years ago and now it doesn't cost $800 to re-image a workstation. I couldn't believe my eyes when i saw the invoice! Yes we had a support contract, they managed everything. Shell will learn the hard way that EDS or any large outsourcer can not deliver the same level of service or be as agile as most internal IT shops.
In my dealings with them as well as working for a considerably smaller out sourcer i noticed a trend. Staff within EDS are internally migratory. We had so many different administrators managing our windows network that everything had to rebuilt from scratch. Yes we gave up on their managed domain and only migrated the exchange mailboxes.
I feel bad for the IT staff that have this happen or the threat looming over their heads. Shell will learn when their environment starts to fail and that 250 Mill they gave back to the investors turns into a 2 Bil charge per year as EDS extorts the fuck out of them for "Extra Services"
I picked Paris because it saddens her to know that Shell IT staff will not be able to afford highspeed internet after they outsource. Now how will they be able to download her latest sexcapade video?
re: more outsourcing
>> Because with only a £14billion profit they really need those
>> £250million in savings. Doesn't matter who suffers because it's the
>> company and the shareholders that matter.
The point that I think you are missing, is that the bonus of the person making the decision probably isn't linked to the £14bn - his bonus is linked to the £250m it will hopefully save (albeit in the short term).
More flame bait?
Oh goody - yet another "we're short of articles, so let's mention EDS". It makes me laugh to see that NO-ONE has bothered to mention the other partners in this deal - namely T-Systems and AT&T. Funny that Engineers Delivering Someday get ALL the focus, when - as far as I can see - it'll be T-Systems that get the majority of the critical systems, EDS is only doing "desktop support", and who the frak cares if some PHB's laptop goes down when he's having a "private dictation" session with his PA? (nudge, nudge, wink, wink).
So are T-Systems a wonderful bunch of people or, and I think this more likely, yet another bunch of spineless a-holes that'll sack most of "The 3,200" in about 6 months, and move their jobs to a bunch of useless monkeys stuck in some sweatshop in the Asian jungles? I think I'd put my money on the latter option! Similar for AT&T...
If so ex-Shell guys, then I feel for you - I'm in the same boat. :-( I'm not a racist, but just don't ask me to be polite to anyone of Indian extraction at the moment. :-P
I've seen outsourcing work really well - the customer just says "this is what we want, this is the max we're willing to pay, go do it!". Unhappily, most of the UK deals I've seen/heard-about are more like "this is what we want to do today, and here's *our* team that'll peer over your shoulder while you do it and double-check *every* decision you make, and force you to justify it. Now how cheap can you do this?". And they wonder why it's costing them *more*!
The phrase about drunken parties in beer brewing establishments comes to mind... (and while I'm talking about brewers - S&N r.i.p.)
Shell staff outsourced
Eummm I think the vast majority of Shell IT workers are contract workers... Meaning they can kick you out if they do not like your face...
I once applied with them and back then (2003) they paid about 10quid an hour...
I understand that mngrs think that outsourcing callcenters to 3rd world countries is cheaper and the service is equal... However their idea of speaking fluent English isnt the same as the standard in the Uk... Try to get an engineer with ie a scouse accent explain a problem to an Indian guy who barely speaks real world English... Result Engineer frustrated Indian guy chilled and Shell happy coz they paid less for the call...
It is the backbone of any itself respecting company now a days under spending on it will wreak havoc on you in the semi long run
What can you do?
Well, complaining won't do anything so if you see a company that behaves in a way you don't like then don't use that companies products. (This can be a problem where monopolies rule like UK Water Suppliers). Don't like Shell's profits?.. then don't buy Shell petrol and vote with your money.
About the working in India thing..
I seem to remember that due to one anchor from one boat, much of the Middle East and South Asian areas lost internet connectivity for a while and had to resort to slower backups. Not exactly the super reliable place to base your internet connected industries then. But cheap, they are cheap. (even though the Virgin TV call centre I phoned didn't understand my explanation of the problem. "the set-top box keeps re-booting constantly" seemed obvious to me.
Couldn't agree more
re "Overinflated opinion of themselves" By Anonymous Coward
Posted Friday 1st February 2008 13:04 GMT
You hit the nail on the head. I used to work for Shell and went through many a re-shuffle in the 80's and they haven't changed one bit. Am I bitter? No they do what they think is right for their company and we move on. I did and have the best job ever and not a corporate stats driven suit in sight at my place. I now have a great job with all the benefits I need and let my staff do the work based on their abilities and experience and don't patronise them with stats and targets either, and they respect and appreciate that and give their all to our business as a result as do I.
I am 100% certain I'd never had got this position if I'd stayed at Shell UK Downstream Oil.
So I'd like to say THANK YOU to Shell for making me redundant, thanks for not having the confidence in my abilities all those years ago and thank you for letting me see what an arrogant bunch of senior management Muppets you employed way back then and still do today. They may line their own pockets indirectly but as a senior manager I I can sleep at night with a clear conscience I never made a decision to remove staff for profit only.
Do I buy Shell Fuel today? NEVER! Would this be the ultimate punishment for them and their profits if everyone stopped buying from their service stations? Yes it would.
Would everyone do this though? No. In which case move on and stop worrying about them.
To all the IT staff losing their roles - There is a life after Shell, seek it out and you'll find it.
Ex Shell employee (And much better for it)
Try working in IT in an investment bank...
...and you will see examples of this industry sickness from all sides all day long.
I don't know of a company that doesn't make these amoral, short-term, profiteering decisions.
This is how things are these days - most of us IT workers who see some of the system know how - dare I say it - 'evil' it is. ALL of the senior management level know how it works and concern themselves with getting their share of the pie before it's gone and how to buzz along to the next pie.
Outsourcing and offshoring are the latest 'vehicle' for senior management to show how wonderful they are at boosting profits (or rather cutting costs) and getting themselves a big bonus, but anyone who has been around a while knows that it's something different every couple of years.
The fact that EDS and the like are still in business even given the number of examples of their incompetencies and failures is testiment to those-that-make-the-decisions having a barely hidden agenda that has nothing to do with making things better (except their bonus pool).
"Investment" used to mean putting money or resources into a company to help make it better. That is certainly not what 'investors' and investment banks are doing these days.
So. Should Shell workers be upset at cost saving exercises when profits are so enormous? Well duh. Does anyone know of a company that really values its employees these days?
The longer I work in IT and investment banking the more I realise that a lot of stuff I used to write off as radical socialist weirdness is actually quite reasonable.
cutting costs is what oil companies do...
I to work for a large oil major and cutting costs by whatever means (IT or otherwise) is essentially how the Oil companies continue to rack up the profits year on year. It is in the culture of oil companies to reduce costs every year sinc eit is after all a commodity business. IT tends to get hit harder since it is always seen as a cost and rarely do the business lines define or cost the benefit of it in the first place! We are an expense.... a totally essential expense though and outsourcing does not always save you money in the long term - after all the companies you outsource to have to make a profit and the margin is almost certainly more than the 12% return on capital employed that the majority of Oil majors aim for.
Not a chance
The key reason Shell made so much money was because of extraordinarily high oil prices. Prices that will almost certainly dip if the situation in the Middle East stabilises at all.
Considering how quickly this planet is running out of oil (20 to 40 years are figures I see often) and how rapidly the need for oil is increasing I can't see the prices ever going down.
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