Lloyds Banking Group (LON:LLOY) have plans to move almost 2,000 employees to IBM (LON:IBM) as part of a seven-year deal worth £1.3 billion.
As part of a restructuring plan to reduce costs, the bank is hoping to remove thousands of jobs to boost share price, support dividend payments and streamline the business as the government prepares to sell down its remaining stake in the bank this year.
The transfer of staff has been approved by staff unions Accord and Unite and will be moved from Lloyds’ data centres in Copley, West Yorkshire, and Edinburgh to IBM.
The bank 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.”
The Lloyds Trade Union have argued that the IBM deal had been criticised by “senior managers and head of functions in IT, concerned that critical systems which underpin the bank’s major payment, treasury trading, settlement and digital services are being outsourced to a third party to eventually be run offshore.”
“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’,” it said.
The union, which is no longer recognised by the banking group sent a newsletter to 35,000 members that the staff moved to IBM would be kept on for about a year but then most would be laid off within the first four years and replaced by cheaper, offshore workers.