Barclays to axe 500 UK IT jobs

Barclays is preparing to cut up to 500 jobs from its UK IT department in the next month as part of a massive shake-up that includes the restructuring of a key $350m desktop outsourcing deal with EDS.

Multiple sources have confirmed to silicon.com that the bank will sack between 450 and 500 middle and lower ranking staff from Barclays' 2,500 UK IT workforce over the next four weeks after staff were told that their jobs are at risk.

The move is believed to be part of a strategy by the bank to replace the lower 10 per cent of performers. IT staff claim that a new performance benchmark and grading system has recently been introduced and once the job cuts have been implemented Barclays will replace the staff with "higher performers".

The $350m outsourcing deal with EDS to standardise more than 40,000 PCs on Microsoft Windows and Office 2003 is also under review by senior executives at the high street banking giant, with one insider claiming the project is in complete "disarray".

The source told silicon.com in an email: "The IT infrastructure is left half done with a mix of really old PCs [middle 90s] and new PCs that are costly to support and completely incompatible with each other."

But despite speculation that Barclays will walk away from the seven-year desktop outsourcing deal, silicon.com understands from other sources close to the situation that EDS will not be ditched and the restructured deal will actually see the scope of the EDS contract extended.

Other suppliers are also facing increased scrutiny from senior executives and sources claim Accenture and HP's involvement in IT deals at the bank is also under review.

A Barclays spokeswoman disputed the level of job cuts and claimed the 500 figure was "far too high" but refused to confirm what the actual number would be. She also admitted the EDS outsourcing deal is under review.

"We are in the process of reassessing the structure and nature of our contract with EDS based on the changing IT needs of the bank. We have ongoing relationships with HP, Accenture and Microsoft. This contract relates to migrating desktop software and was in its very nature a one-off contract," she said.

A statement from EDS said: "EDS understands that the bank is reviewing its overarching IT procurement strategy and considering the potential for a more harmonised approach to IT procurement. We are confident our agreement with Barclays has the flexibility to accommodate their changing requirements."