Lloyds To Transfer 1,900 Jobs To IBM In £760m Cost-Cutting Move

Lloyds Banking Group has announced that it intends to transfer more than 1,900 jobs to IBM as part of a £1.3 billion contract that it hopes will save it around £760 million in costs.

The seven-year deal also includes the outsourcing of many of its computer systems, intended to streamline the business and increase it’s agility, making it more able to respond to industry changes.

However, trade union officials have opposed the plans, saying that it could  weaken Lloyds’ “existing security controls” and make it more vulnerable to cyber attacks.

IBM deal

In a newsletter sent out to 35,000 members, Lloyds Trade Union (LTU) said that the transferred employees will be kept on for a year, but the vast majority will likely lose their jobs within four years to be replaced by offshore workers.

Despite the contact being agreed by in-house staff unions Accord and Unite, LTU cited concerns from  “senior managers and head of functions in IT” 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 20 million 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.

Lloyds was quick to respond, saying: “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.”

Security worries are still fresh in the mind for Lloyds customers, after an online banking outage in January was found to have been caused by a Distributed Denial of Service (DDoS) attack.

Although customer details were not breached and no money was stolen, more than 20 million customers were locked out of their accounts and, with criminal gangs using technology more than ever before, now is not the time for any company to be weakening its defenses.

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