Barclays is preparing to cut up to 500 jobs from its UK IT department in the next month as part of a massive shake-up that includes the restructuring of a key $350m desktop outsourcing deal with EDS.
Multiple sources have confirmed the bank will sack between 450 and 500 middle- and lower-ranking staff from Barclays' 2,500 UK IT workforce over the next four weeks after staff were told that their jobs are at risk.
The move is believed to be part of a strategy by the bank to replace the lower 10 percent of performers. IT staff claim that a new performance benchmark and grading system has recently been introduced and once the job cuts have been implemented Barclays will replace the staff with "higher performers".
The $350m outsourcing deal with EDS to standardise more than 40,000 PCs on Microsoft Windows and Office 2003 is also under review by senior executives at the banking firm, with one insider claiming the project is in complete "disarray".
The source told ZDNet UK sister site silicon.com in an email: "The IT infrastructure is left half done with a mix of really old PCs [middle 90s] and new PCs that are costly to support and completely incompatible with each other."
Other sources close to the situation have indicated that despite speculation that Barclays will walk away from the seven-year desktop outsourcing deal, EDS will not be ditched and the restructured deal will actually see the scope of the EDS contract extended.
Other suppliers are also facing increased scrutiny from senior executives and sources claim the involvement of Accenture and HP in IT deals at the bank is also under review.
A Barclays spokeswoman refused to confirm the numbers of job cuts but admitted the outsourcing deal is under review.
"We are in the process of reassessing the structure and nature of our contract with EDS based on the changing IT needs of the bank. We have ongoing relationships with HP, Accenture and Microsoft. This contract relates to migrating desktop software and was in its very nature a one-off contract," she said.
A statement from EDS said: "EDS understands that the bank is reviewing its overarching IT procurement strategy and considering the potential for a more harmonised approach to IT procurement. We are confident our agreement with Barclays has the flexibility to accommodate their changing requirements."
Talkback
When will UK Companies, Banks, Corporations learn? Outsourcing may save them millions of pounds but will only lose them millions more. BT customers are blocking nuisance calls from India, bank customers have had their full account details made public by American Corporations and it appears that outsourcing removes accountability. When disaster strikes, all a US Corporation has to do is apologise and then the event is forgotten. If a UK company allowed customers account details to be so insecure, the Americans would not accept an apology withouth hundreds of millions of dollars worth of compensation. Barclays should think again! After all, it is their customer's money they spend on salaries and not the personal finance of some fat, greedy Director. Barclays should ask their customers if they want jobs to be outsourced and be honest with the reasons for the decision. If not, all Barclays customers should demand their money, to close their accounts and see if Barclays have enough money to give their customers what is rightfully their own money. I'm sure most banks do not have enough cash to allow mass withdrawals as their have been feeding the Directors with millions of pounds for too many years.