Five companies firing
1. BT slashes 15,000
BT has removed 15,000 staff this year primarily from its Global Services division, in a bid to cut annual costs by £1.5 billion. Problems started for BT in October 2008, when BT announced plans to cut 10,000 staff. In January, BT Global Services took a £340 million writedown due to poor "cost controls".
Problems at BT Global Services have been reported to lie with over-optimistic projections of multibillion pound contracts with the NHS National Programme for IT (last estimates had the contract valued at £1.57 billion) and a reported £1.7 billion deal with Thomson Reuters.
BT's massive writedown did not stop BT Global Services head François Barrault leaving with a £1.6 million termination package, along with hundreds of thousands for school fees, housing and pension contributions.
BT's most recent quarter revealed further losses of £96 million in the second quarter of the year, as the industry speculates that BT may eventually part sell the division.
2. HP EDS merger leads to protests
When HP bought EDS for £7.5 billion in 2008, job cuts were an inevitable outcome. HP initial estimates were to slash 9,300 from Europe, including 3,400 staff in the UK, following the merger of the two suppliers.
EDS is a major IT services supplier and holds large UK government IT contracts, including work with the Department for Work and Pensions and the Ministry of Defence.
The job cuts angered union officials and lead to rounds of strikes. In late 2008, Unite trade union members took part in protests in London and Bristol as part of a European day of action also targeting sites in Austria, Belgium, Italy, Spain, France and Germany. In November 2009, around 1,000 former EDS staff and members of the PCS union voted to strike over upcoming job losses, pay freezes and voluntary salary cuts.
HP has cut about 19,000 jobs from the services group since it closed its EDS acquisition.
3. Fujitsu on tenterhooks
In November, Fujitsu employees called off a three-day strike and agreed to extend talks over pensions and to delay compulsory redundancies. Fujitsu management and staff have been wrangling over redundancies and pensions for months, after the company introduced plans to close its defined benefit pension plan to future accruals. But Unite said the move would effectively reduce the pay package by an average of 20 percent for some 4,000 UK employees affected.
“The company intends to force this through by dismissing employees after the end of the consultation period in November, and offering them employment on new contracts which are unchanged except in relation to pensions,” the union said in a statement.
Fujitsu is expected to notify affected employees on 11 December, but has delayed any decision regarding compulsory redundancies until next year.
4. Lloyds back office 5,000 cuts
Since the merger of Lloyds TSB and HBOS, the bank has had a string of job losses. The tally of job losses at Lloyds Banking Group stands at more than 15,000, including 5,000 announced in November. IT and back-office staff have taken the biggest hit. Lloyds, now 43 percent owned by the taxpayer, is trying to cut £1.5 billion from costs by 2011. In spite of the cuts to operational staff, Lloyds maintained that group operations were “at the heart” of its business. The division was “essential” and ensured the “smooth running” of its business.
5. Loss-making BA slashes IT supplier spend by £24 million
British Airways plans to cut its workforce by more than a tenth after losing £292 million over the slow summer. The airline has begun a cost-cutting programme to rebalance its books and has reduced overheads by £400 million in the first half. BA has also dramatically cut £24 million from its annual expenditure on IT suppliers as it struggles with mounting losses. The airline did not disclose exactly where it made the IT cost cuts, but technology costs were cut back far more than in any other supplier. In its results, BA said the half-year costs of technology, accommodation and ground equipment had been cut by 10 percent year-on-year, to £271 million.
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