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Bank plans to offload employees

Lloyds switching 2,000 staff to IBM in offshoring deal

Uberior House, LloydsLloyds Banking Group is planning a huge outsourcing of IT staff in Edinburgh and Yorkshire.

The bank is looking to move almost 2,000 employees to IBM in a deal worth £1.3 billion over seven years. It will cut costs by £760 million.

Project Aurora was due to be announced in January, but negotiations with IBM are said to be taking longer than anticipated.

Those staff affected are mainly at data centres in Edinburgh and West Yorkshire. It is understood that many of the jobs will offshored.

However, there is said to be mounting concern among IT managers and other senior figures over moving critical systems which underpin payment, treasury, trading, settlement and digital services to a third party.

There are worries that it could make Lloyds more vulnerable to a cyber attack.

Lloyds Trade Union, which is no longer recognised by the bank, said in its newsletter to its 35,000 members that staff transferred to IBM would be kept on for a year but most would be laid off within four years and replaced by cheaper, offshore workers.

The union quoted from a presentation given by Morteza Mahjour, Lloyds’ chief information officer, saying 1,961 staff would be transferred to IBM, mostly from Lloyds’ data centres in Copley, West Yorkshire, and Edinburgh.

It said: “Even the bank admits that the migration of the accounting details of 20m customers on to a private cloud to be run by staff based offshore could ‘weaken existing security controls and adversely effect the confidentiality and integrity of bank data’.”

The union said only 193 staff would remain on the Lloyds contract after four years. The bulk of the work would be undertaken by 993 staff based offshore.

The bank replied: “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.”

The IBM deal is understood to have been drawn up by Jacqueline Guichelaar, who organised a similar project at Deutsche Bank with Hewlett-Packard before joining Lloyds last year as chief information officer for infrastructure technology services.

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