By Andy McCue, 17 December 2003 08:25
NEWS Barclays is set to sign a £450m IT outsourcing deal with Accenture that could see hundreds of software development jobs moved to India.
Barclays has selected Accenture over IBM and is now in final negotiations with the firm over a six-year contract for the outsourcing of the bank's 'Build Services' application development group.
silicon.com understands from a source that the contract will be worth some £75m per year and more than 1,000 software development jobs at Barclays' sites in Poole, Bexley Heath and Radbroke will be affected by the agreement, with up to half of those likely to be moved to India.
There will also be a "significant" reduction in the number of jobs, which will be mainly contractor positions, after the transfer. Financial services union Unifi is in discussions with Barclays and Accenture to ensure there are no compulsory redundancies.
Unifi, which represents two-thirds of Barclays' 9,000 IT staff, wants the bank's redundancy terms - which include commitments to voluntary redundancy and redeployment - to be adopted by Accenture for the transferred staff for the life of the contract.
A Unifi spokesman said discussions are "constructive" and will cover areas of compulsory redundancies, social responsibility safeguards and redeployment.
"We are hopeful of a good deal for Build Services. Hopefully we are going to conclude discussions before the end of the year," he told silicon.com.
Barclays admitted it is talking to Accenture but said no contracts have yet been signed. A spokesman told silicon.com that there will be no compulsory redundancies.
"We've run a number of briefings to staff telling people where we are going with this. It's still a bit early to talk about specifics and whether there will be an offshore element but there would not be any compulsory redundancies as a result of any offshoring," he said.
The latest Barclays deal follows an explosion of financial services firms looking to cut costs by outsourcing IT services to low-cost offshore centres such as India. Earlier this month insurance group Aviva angered the union Amicus when it announced it will move 2,500 jobs from Norwich Union to India during 2004.
Accenture said it is unable to comment on ongoing discussions and IBM declined to comment.
Comments
There are 22 comments. Join the discussion
1. Phil Mellor
The principal of outsourcing IT to India is a good, but having experienced this twice and having seen it fail, not due to any level of competence, it is a simple business understanding that is missing. No level of Project Management seems able to bridge the gap
2. anonymous
How long will it be before the British public realises that unless we adopt Buy-British policies (or at least Buy-European) that the only jobs available to us will be as CEO's of multi-million-pound conglomerates.
What benefit, then, Tony Blair's target of everyone going to university. At least under current proposals the Governmant plans to write-off student loans after 25 years of unemployment.
I used to work in a factory that employed over 500 people, those jobs are now in Eastern Europe.
Following TSB's announcement to close a call centre in Newcastle I cancelled my credit card account with them. Now I will be thinking of moving my current account from Barclays.
And before any of you think these moves will lead to a cheaper and better service, remember that every tme a job is lost, more of your taxes have to go to supporting families that once supported themselves.
Peter Haines, with his comments that exporting jobs is good for our economy, deserves to be next in the dole queue. Still, he'll sleep happy in the knowledge that the taxpayer has stumped up to cover his pension shorfall (don't get me started on that one!).
3. anonymous
If, like me, you're currently a Barclays customer and in IT, "vote with your feet" ... transfer your banking to a different supplier (are there any left who haven't outsourced to India ?) and don't forget to let Barclays know WHY you're doing this. When enough people have done this the message WILL get through.
4. Mike
Time to bin the barclaycard
5. anonymous
Its exploiation of cheap labor. Seems like the good Old Empire days. Shame on you.
6. anonymous
www.noukjobstoindia.com
7. Narayana.D
Professionally its spells profit all the way long for outsourcing work to India! But who’s going to take care of the personal backlash, which could fuel a serious debate?
Respective governments should pitch in to by doing the prior ground work and chalk out a fair deal!
Its not nice to be a looser at the end of a hard days work!!
8. Noel
The principle of outsourcing IT to any country is not good, despite claims to the contrary by some who have commented here. Perhaps when those who make such claims find their own jobs outsourced their tune will change.
Indian IT staff are no more qualified than their British equivalents, and the language/cultural difference, not to mention the time-zone differential, are all factors against such a move. If Barclays want to put profit ahead of British jobs, they should be hit where it hurts most... in the balance sheet.
9. Paul M Ross
First 'Mumbai Union', now 'Bangalores Bank'... they should be saying 'quote me unhappy' and 'effluent in finance'.
So what do we do? We all shift our custom to companies where we hope the money stays in Britain, for the meantime.
There needs to be a list of companies we can trust - where do I find one?
10. Jon Skellington
A list of Companies who take actions such as these should be circulated and the UK consumer should vote with thier feet , ultimatley our economy will be hit by the actions of over profit hungry corporate giants, and then they will be hit by the resulting downturn !
11. J.Hart
No Jobs - no problem for Barclays and the other Banks just more fees and more interest to gather from their debtors! I for one am voting with my feet and will avoid all companies who take this action. The looser is the consumer the winner the company and share holder. God help us!
12. anonymous
There is no doubt that Indian workers will be more cost effective and probably more dedicated to their job role. Haivng worked there myself in the past I know how much overpaid and under skilled dead wood and fat there is in IT. But have no doubts, this is a serious committment and will require all of the skills and knowledge the Indians can muster to provide a decent service.
13. anonymous
As an ex employee (I left in 1999) - the writing was on the wall - Barclays brought in accountants to run IT - all they care about is short-term profit, not the customer or even the long-term future of the company - Barclays will be in deep trouble very soon
14. Som
somebody says that 'Indian IT staff are no more qualified than their British equivalents' , guys take this as a Christmas Joke and forget.
Dont post such comments oterwise it will lead to hate message and you will end up in Race Race .
Its a Darwin's threory - Struggle for existance and Survival of fittest.
-Som
15. anonymous
Its a disgrace. It has nothing to do with efficiencies or a desire to improve services. It is just plain greed.
Where does it end?
16. anonymous
This web page is trying to get a list of companies together. www.noukjobstoindia
17. Results
Having worked on various IT Projects involving some sort of Off-Shore deployment; over the past 4 years I can only ask myself whether its 3 or 5 years before the jobs come back to the UK!
I find it hard to understand how businesses in the UK and US can justify moving these functions off-shore when they are revealing $Billlions of PTP (Post Tax Profits). In the recent, HSBC and Barclays have been in the front line. These banks give "Cost Saving" as an excuse to stab the local economy; yet these very people are revealing HUGE amounts of profits. Or am I being Mis- guided? Maybe these cost savings will bring in a 4% APR Barclaycard or wait a minute.... a 3% APR HSBC Gold Credit Card! NOT
Seems that this trend for Off-shore may be easing. Dell and Lehman Brothers are to bring there recently deployed Off-Shore functions back to the UK or US! So as I said...will it be 3 years or 5 years before its back!!
So dont worry guys! These jobs will come back to the UK.......just watch what happens in the coming few years!.....No matter how big the CEO to CTO - if the customers dont appreciate it or dont like it......it wont happen!!!!.....DELL as an example!....They had a very substanital amopunt of callers complaining about a call centre in India!
Thats all folks!
18. Alex Geddes
The problem is that Barclays Bank fails to understand the economics of system development.
Offshore development sounds great until you realise this is some 3% of system lifecycle costs.
A public listed company who will be nameless employed some 450 people to test the results of their development offshore and implement.
This bigger offshore/ onshore at the expense of onshore commitment to design and development will rebound.
If you or I was providing offshore services, we would worry about the commitment of our cusomers to offshore services.
A few years from now we will be asked to contribute to the redundacy fund for offshore call centres. Certain Banks called for this when they ran out of space in South America and other areas.
I deposit my money in the UK. I expect this will benefit our economy and then a wider area.
So why move jobs to where I cannot have one? I would love to move to India and have working paradise. I do not expect the Indian Government will provide such equality?
19. Peter Rose
When will companies learn that outsourcing their critical business activities is a recipe for disaster.
IT must be for a bank a key resource that used properly will give market leverage.
It is just as difficult if not more so to manage an outsourced resource. You still have to decide what you want to do and make sure it's done.
However if you are trying to get a market edge, the people doing this are no longer yours and have no real comitment to do it well for the future of their company because it is no longer their company.
Even the guru who thought up this crazy idea in the 90's has said that companies have go too far in outsourcing. Out source what is not your core activity BUT IT is the core activity for a bank
20. anonymous
Everybody has jumped on the bandwagon to bash Barclays - happens at least once a year.
Barclays are not outsourcing to India. Barclays are outsourcing to Accenture. Barclays staff transfer to Accenture under TUPE.
Accenture become responsible for providing the service and will have to adhere to strict service levels (i.e. better than today at reduced cost). If Accenture choose to move jobs to Timbuktoo, that is their choice.
21. anonymous
Previous post reads .....
'Accenture become responsible for providing the service and will have to adhere to strict service levels (i.e. better than today at reduced cost). If Accenture choose to move jobs to Timbuktoo, that is their choice.'
Yeah and Barclays avoid the potentially costly PR hit !!!
22. anonymous
Barclays Staff are being told that its an improvement ofr them to be in Accneture, "full of opportunities" and many beleive it unfortunately, its about time companies are stopped selling peoples contracts without permission of that employee.