State Street, the US bank, has announced plans to sack 530 IT staff and outsource 320 IT workers to IBM and Wipro Technologies, over the next 18 to 20 months.
The roles equal just over a fifth of the company’s current IT workforce of 4,000 employees. IT jobs in the UK and Europe will be affected, but those in the US will be hit hardest.
The move is part of the bank’s business operations and IT transformation programme, launched in November 2010, which aims to streamline the business and make savings of between $575 million and $625 million. The programme is due to be completed in 2014.
State Street said that extending its longstanding relationship with IBM and Wipro will allow its internal IT resources to become more focused on research and development.
The remaining in-house IT department will also explore the use of new technologies such as developing a private cloud “that will create more sophisticated, client-facing solutions and services.”
“By expanding its relationships with two established industry leaders that specialise in IT support services, State Street can increase the efficiency and effectiveness of its overall IT operation,” the company said in a statement.
James Phalen, executive vice president and head of global operations, technology and product development at State Street, added: “While making changes that impact a number of our employees is never easy, we believe that this move is a necessary step that will allow us to better deploy our resources in line with our core competencies."