Employers factor IT staff into cost-cutting plans

Technology and temporary workers have reclaimed their unenviable position of being first in line to absorb budgetary pressures when public and private sector organisations turn to cutting their staff costs.

F&C Asset Management will reportedly axe 70 jobs across its London-headquartered fund manager business, mainly in back office and IT functions, under its “expenses reduction” programme.

Although the firm intends to expand its services, and no compliance and risk staff will be let go, the bulk of its envisioned £33m in cost savings over the next two years will hinge on the redundancies.

But F&C is far from the only financial services employer cutting IT staff costs: investment houses are transferring their high-paid contract roles to permanent positions, while in their IT departments, banks including UBS, Nomura and RBS have cut contractor pay rates by 10 per cent.

Lloyds Banking Group has now issued its IT contractors a similar ‘take it or leave’ rate ultimatum, yet an umbrella company used by the affected workers says some of the reductions range up to 15 %.

Outside of financial services, IT workers at Peugeot have been included in the French carmaker’s plan to eliminate 6,000 jobs in Europe next year, as part of an €880m (£702m) cost-reduction initiative.

Many of the temporary positions to go (2,500) could be closed by retraining permanent staff to carry out jobs so far undertaken by agency workers, the FT reported, with those in France on IT placements due to be the most targeted.

This replacement of third party, contract, agency or consultant IT workers with internal employees is also underway in the UK public sector, shows a new survey of 17 central government CIO s.

“Very few [ICT] consultants are now employed in departments with many needing to be replaced by internal ICT staff,” said the National Audit Office, which ran the survey.

“With current budget constraints the number of interims and consultants working in departments has fallen significantly….Most CIOs were satisfied with the extent to which they were relying on external resources, though in five departments CIOs considered that they were over reliant on these resources.”

Perhaps signalling how these CIOs might respond, the NAO added: “In the current economic climate it is likely that ICT will continue to be subject to heavy spending cuts which will inevitably include job losses”.

Partly as a result, the office recommended based on the CIOs’ feedback, the government “must pay more attention to workforce planning, deployment of staff and knowledge management.”