Lloyds Banking Group is to move 190 UK based IT roles to India, amidst wider restructuring at the bank and throughout the financial sector.
The banking firm confirmed today that it would be cutting 940 jobs across its business, as part of ongoing staff reductions within the company. A spokesperson told Computerworld UK that a number of jobs would also be moved to India, with 190 back-office IT roles being cut in it UK services division.
"Lloyds Banking Group is today announcing 940 role reductions within the group operations, insurance, retail, wealth and international and commercial divisions. These form part of the reductions previously announced in the Group's Strategic Review.
"Lloyds Banking Group is committed to working through these changes with employees in a careful and sensitive way. All affected employees have been briefed by their line manager today," the company said.
Relevant unions had been consulted prior to the decision, and that it would attempt to redeploy staff where possible, with compulsory redundancies "a last resort", it added..
Ged Nichols, general secretary of Lloyds' workers union Accord, said that the offshoring of jobs to India threatened to remove the expertise necessary to run the bank's IT infrastructure.
"Lloyds is clearly following its established business model, but maybe it is time for that business model to be looked at again," he said. "If we talk to the people in IT [at Lloyds], they say the loss of experience is a big risk to the organisation."
Nicholls added that the movement of IT jobs abroad is a "real fear" for staff, and that the practice is making less economic sense as the wage disparity with Indian staff decreaes. He also highlighted the impact on the UK economy.
"Particularly with offshoring IT roles to India, we are reaching the end of that particular practice making sense as wages in India go up," he said. "The savings that are achievable are reducing."
"In a broader sense, with the state of the economy, should we be losing jobs in the UK and reducing the demand in the economy even further?"
Members of Lloyds staff have also hit out at the ongoing outsourcing of jobs at the company. "There has definitely been a culture change whereby Lloyds Banking Group are quite happy to make senior IT professionals (compulsorily in my case) redundant, and ship the job over to India," one commented.
"This is in the belief that quality and productivity from a newly graduated Indian will be much higher than that from someone like myself with 17 years' service."
Another warned that the prospect of "significant restructuring and dramatically increased outsourcing" could mean that experienced IT staff look to move away from the company.
"The bank is going about things in such a way that all its brightest and best colleagues will simply take the initiative and leave, rather than risk the roller coaster to come."
Yesterday another bank, Barclays, announced that it was looking to reduce its employee headcount. It is expected that Barclays will also offshore hundreds of back office roles, with a cull of up to 2,000 staff across its international operations be consulted with staff.
Earlier this week a survey conducted by the Confederation of British Industry (CBI) and PricewaterhouseCoopers (PwC) highlighted that financial companies are expecting job cuts to continue in the sector into 2013, following a number of reductions last year.
The report showed that 25,000 staff were cut during the fourth quarter of 2012, a higher figure than expected, with another 18,000 jobs expected to go over the next quarter.
The prospect of further restructuring among financial services organisations means that total job losses in the industry since the height of the financial crisis in 2008 will soon pass the 130,000 mark.