Oil giant Shell is set to cut costs by outsourcing its IT infrastructure, according to new reports.

Thousands of IT jobs will be outsourced as part of the shake up, which is aimed at saving the firm $500 million (£250 million) annually.

Contracts with AT&T, EDS and T-Systems, who will run the bulk of Shell's IT infrastructure, are said to currently be in the process of finalisation.

A spokesperson for Shell told news provider Silicon: "We have been working on simplifying the organisation and generating efficiencies since at least 2005.

"Our IT infrastructure sourcing programme was launched to review the feasibility of outsourcing a substantial part of Shell's global IT Infrastructure services to a limited number of key suppliers. We are in the middle of commercial discussions and expect contracts to be signed [later] in 2008, at which point we will share more details."

The three outsourcing companies involved in the deal will each provide a different service, with EDS responsible for Shell's end-user computing services, T-Systems managing hosting and storage services while AT&T will take over network services.

© Adfero Ltd