Lloyds is about to outsource nearly 2,000 tech jobs to IBM, according to the union representing the bank's workers, in a billion pound deal that will save cash in the long term.
The bank and the tech giant are on the verge of agreeing a seven year deal worth £1.3bn that would see 1,900 IT staff transferred to IBM. Lloyds' chief information officer Morteza Mahjour is said to have confirmed the plans according to Lloyds Trade Union's (LTU) update to 35,000 members and first reported by the FT.
Staff will transfer under TUPE agreements and will include permanent staff, contractors, third parties and offshore suppliers based in Copley and Edinburgh. However, after four years, the bulk of staff expected to be working on Lloyds business within IBM as a result of the transfer is expected to be reduced to just 193, with a further 993 IBM staff located outside of the UK. LTU claim staff being transferred will be made redundant after a year.
The transition is expected to save Lloyds at least £759m with further cost savings to follow, however, the union indicated concerns have been raised internally about the banks critical systems such as payments, treasury trading, settlements and its digital services being run by a third party and offshore. This is said to have delayed the deal which was expected to be agreed in January and the newsletter update also claims that HP had initially been lined up as a back up to IBM if the deal fell through.
A Lloyds spokesperson said: "As we have said to our colleagues, we are considering options to extend use of cloud technology in pursuit of the group's aim to be the best bank for customers. We do not comment on speculation, and if any decisions are made they will be communicated to our colleagues first.”