UBS cuts IT contractor pay rates by 10%

Freelance technology workers’ pay optimism was tempered yesterday when UBS confirmed it has cut rates for direct IT contractors who want to avoid being terminated before Christmas.

Issuing the ‘take it or leave’ pay reduction, the Swiss bank told such IT contractors across its UK and global ranks to reduce their rates by 10% or face a speedy exit.

No exemptions or scope for individual negotiations are included in the ultimatum, which represents the third 10% cut UBS has made to IT pay since the financial crisis began. 

It also represents the third time this year that a bank has asked its IT contractors to do the same work for less money, following similar cuts at Barclays and RBS in the first quarter.

Speaking to ContractorUK yesterday, a UBS spokeswoman said: “UBS, like many other financial institutions, continuously reviews its operations, associated resourcing…and contracted staff costs. Our current review includes reductions in contractor rates and in our overall expenditures with third-party suppliers.”

Initial reactions from affected IT contractors imply that many have accepted the bank’s offer (effective from December 1st) because, even with the 10% cut factored in, they are still on a ‘market’ rate.   

While that has prompted some understanding as to why UBS has imposed the cut, on the basis it is unfair for clients to pay over the odds for IT skills, some say accepting a cut only encourages other end-users to follow suit.

But according to one IT contractor on the ContractorUK forum, the problem for those contractors who do reject the reduction and quit is that their defiance won’t amount to much.

He wrote: “For every one [contractor who] makes a stand and declines the cut…[UBS] knows there are nine [others] who will grumble and take the cut so…they are onto a winner.”

Editor’s Note: Related Reading –

Why IT contractors' pay packets will get fatter still

ONS cuts IT contractor pay rates by 6%

Contractors’ Questions: What to do if my rate gets cut?

IT contractor lawyer attacks rate-cutting banks

Beating the IT contract crunch: client cuts

What's hot in IT contractor training in 2014-15

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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