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American Express, Barclays, Lloyds, Legal & General and ABN Amro, five major financial services employers, have announced job cuts, some in IT, totalling more than 12,000. Technology staffing businesses signalled to CUK that the new wave of job cuts, affecting hundreds of IT staff, undermined recent signs that financial services was poised for a turnaround. One of those businesses, Powerchex, which screens IT contractors for banks, predicted that temporary IT workers’ pay, not just their jobs, would be next to feel the squeeze. “We have not seen the end of this recession yet, and the repercussions to the opportunities [for IT staff] may end up being much more severe than what we see now,” it said. Another supplier of IT workers to financial services said all contract opportunities on its books were being pursued by a much higher number of candidates than five months ago. In fact, Jenrick CPI, which puts financial services top of a list of its client sectors, declined to rule out that its IT contractor numbers were up 27% since the beginning of the year. Today’s high availability of skills, which is unprecedented in most HR managers’ careers, is being used by IT buyers as leverage to downgrade pay for new and existing contractors. “Rates are being cut everywhere,” confirmed Alan Rommel, managing director of Parity Resources, when asked to pinpoint the reductions. “This is especially true in financial services.” ABN Amro, the Dutch bank, added to the pool of job-seekers yesterday, by saying it would make 6,500 staff redundant to reduce costs, as part of plans to merge with Fortis. American Express, the credit card issuer, announced it would cut 4,000 jobs, as it too looks to save millions this year, saying the “reengineering” was in light of the “economic outlook”. The cuts affect staff across its business units, and will take effect alongside a cutback on the firm’s expenses for consulting and professional services, as part of a plan to save £521m. Lloyds, the part-nationalised British bank, said it would shed 625 jobs, on top of the 2,225 roles it vowed to close in its retail arm when the lender merged with HBOS last September. Plans by Lloyds to create 300 jobs, which would reduce the net loss to 325 posts, failed to pacify unions, which accused the group of embarking on a strategy of “death by a thousand cuts.” Officials at Unite made the claim having just appealed to financial employers not to “simply take short-term decisions to cut staff, without consideration for future levels of service”. It was a response to Legal & General, the insurance company, which this week announced it would make 560 staff redundant, most of whom work in three of its processing centres. Last night it emerged that Barclays had become the latest financer to lengthen the queue of jobless techies, amid reports an email to staff states 350 full-time IT workers face the axe. “Companies are looking to the market for better quality candidates to replace permanent senior IT posts,” explained Alexandra Kelly, managing director of Powerchex. “The reality is that [financial] firms are only taking on new people if they have a new project, and at the same time, they are [looking at] keeping their existing contractors [for] longer.” Cuts to IT full-timers were not a boon for IT freelancers, she hinted, as several big IT-led initiatives were now on hold, partly because directors and senior techies had been laid off. “At the same time, financial institutions have been asking IT contractors to take substantial cuts in pay - as much as 25% - but this does not seem to be causing [too many] defections.” Evidencing her claim, Ms Kelly said an HR director at a top financial institution told her last week: “We dropped the rate we pay by 10% and nobody complained; I wish I had said 20%.” May 20, 2009 Email this article Printer friendly page Previous Page
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