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Story URL: http://www.silicon.com/research/specialreports/enterprise/0,3800003425,39122814,00.htm

HSBC IT staff fear restructure will lead to "total outsourcing"
Bank to centralise European IT function from January…

By Andy McCue

Published: Monday 02 August 2004

HSBC is to create a standalone centralised European IT function from January next year in a move the finance union fears is a precursor to "total outsourcing".

The bank's 3,000 UK IT staff were only told of the change, which will be effective from 1 January 2005, in June in an internal memo from CEO Stephen Green confirming a review of the bank's different business areas. But finance union Unifi is furious that there has been no consultation.

No firm details on the restructuring are available but silicon.com understands that options range from a simple paper change to something "completely radical".

A union newsletter seen by silicon.com said: "The business rationale driving this reorganisation is the comparison HSBC will be able to make between the costs of an in-house IT operation and third party providers – potentially a halfway house to total outsourcing. Either way there will be contractual consequences for terms and conditions and, crucially, pensions."

Hugh Roberts, national negotiator for Unifi at HSBC, said the older IT staff in particular are worried about the consequences of going down the outsourcing route.

"About a third of HSBC's IT organisation are over 50 years old and their pension benefits are very important to them. But then you've got a younger set who are up for being outsourced from the bank," he said. "Outsourcing is a definite fear as HSBC will be aware of the fact that Barclays has outsourced a fair bit of IT work."

Roberts said that if the standalone IT function has internal TUPE transfer rights that guarantees staff pension rights then "we'll work our way through" but he warned that if pensions are under threat then staff will be balloted on potential strike action.

HSBC is currently trying to set up an urgent meeting with the union to discuss the plans.

No one at HSBC was available for comment.