Lloyds Trade Union (LTU) expressed concerns of mass layoffs over the £1.3bn outsourcing deal that Lloyds Banking Group is likely to sign with IBM.
The union, which was derecognized by the bank in 2015, said that the bank looks to save £760m a year through this contract, which will see the movement of nearly 2,000 IT jobs to IBM.
In a newsletter to its 35,000 members, LTU expressed fears that over 1,961 staff outsourced to IBM would ultimately be laid off after four years.
According to LTU, “1,961 staff will be transferred to IBM including permanent staff, contractors, 3rd parties and offshore suppliers. However after 4 years, only 193 of the staff transferred to IBM will be still working on the LBG contract.”
Citing a presentation by Lloyds’ CIO Morteza Mahjour, the union said that majority of the employees from the bank’s data centres in West Yorkshire and Edinburgh would be transferred to IBM.
The outsourcing discussion, which was reportedly initiated in January this year, was delayed as many staff expressed their concerns over layoffs and cyber security.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
“One of the reasons the deal is being delayed is the mounting internal criticism of the Bank’s proposals from Senior Managers and Head of Functions in IT concerned that critical systems which underpin the Bank’s major Payment, Treasury Trading, Settlement and Digital Services are being outsourced to a third party to eventually be run offshore,” the LTU newsletter added.
LTU expects the agreement to be announced in the next few days, although the bank has not revealed any development on this front.