Lloyds consolidation leads to IT job losses

Thousands of staff will lose their jobs following Lloyds TSB's takeover of HBOS

Lloyds Banking Group has started a group-wide consolidation of functions, which will result in the loss of around 2,100 positions - many of which are in IT.

The restructuring follows the HBOS merger, and IT employees in the group operations area – which provides support functions including payment and business services and banking – will be among the hardest hit, with 700 redundancies expected in the division over the next three years, including 400 contractors.

Affected staff were informed of the decision today. As part of the process, the banking group also enforced a 15 per cent reduction on IT contractor rates and reportedly temporary workers were told to take the offer or leave.

The deadline to submit acceptance of the offer was last Monday. According to a Lloyds spokeswoman, no decisions have been made in relation to the process.

The spokeswoman added that the review of Lloyds' wholesale division, which provides banking and financial services to business customers, does not mean a significant impact to technology workers.

No further permanent roles will be offshored, according to Lloyds, but the bank says that no functions are expected to be brought back in-house and there are no plans to replace suppliers, even though agreements are “constantly under review”.

It is also expected that some 350 new roles will be created to mitigate the losses in the wholesale division across the commercial, corporate, finance and risk operations.

“By bringing the businesses together, we will be better placed for the future. Regrettably however, some of our colleagues will be affected by our plans,” said director of group IT and operations at Lloyds Banking Group, Mark Fisher.

“We understand that this difficult news will be unsettling and we will be working closely with those colleagues affected,” he said.

Lloyds TSB appointed Fisher, previously executive director at Royal Bank of Scotland (RBS) and ABN Amro chairman, to lead the technology and operations function of the consolidated group in November.

Formerly responsible for the manufacturing division at RBS and its activities including IT, property, purchasing and back-office services functions, Fisher’s achievements at his former employer included carrying out the integration of NatWest when it was acquired by RBS in 2000.

Around the time of Fisher's appointment, the bank's outgoing chairman Victor Blank said the combination of networks and back offices in the retail and wholesale divisions at both banks would allow the firm to cut costs dramatically.

By 2011, the group should expect savings of around £790m, via the streamlining of IT in retail areas of the business such as distribution infrastructure including branch network, call centre operations, and associated management and support functions.