British bank cuts 4,500 IT jobs Lloyds Banking Group is cutting 4,500 jobs from its IT department as part of its integration of Halifax and Bank of Scotland. The bank, which now includes Halifax, Bank of Scotland, Scottish Widows and Cheltenham and Gloucester, is 40 per cent owned by the taxpayer. It was pushed to bail out HBOS at the height of the financial …
I left LLOYDS this year (both current and savings account). It is remarkable easy to do so. Halifax pays the best rates at the moment, so I signed up with them and they took care of moving all my standing orders, direct debits, etc. which was nice. You also get signup bonuses, monthly loyalty pay-ins and extra rates if you move both accounts.
A few years back I worked for an private investment firm which offshored all its technical support and a lot of development to India. In theory this is a great idea because the hourly rates for work are half what it would cost in Europe.
In practice however it meant a) disinterested staff b) no push back if a design, requirement or request was ambiguous or contradictory c) no proactivity or initiative d) wasted conference calls because they could barely speak English. Productivity went so far down the toilet so that the money saved in billing rates was lost through project overruns, retraining and substandard code.
Part of the problem I suspect is that there are so many outsourcing / offshore outfits in places like Bangalore that churn is massive. Places are revolving doors as people flit from one job to another, the staff are disinterested and the knowledge flies out the door. It looks great on paper but it sucks in practice.
I've worked for a large financial firm that was big on offshoring too and it wasn't all bad news.
While the workers were cheap (if not very good and unable to use inititive) said company found the management was terrible. Queue a load of middle and above managers getting paid their UK wages to live and work in India, inside the outsourcing company - all of this with free flights/double holiday/free accomodation (including staff) and all bills paid.
The line manager I was reporting to did two years and came back with enough money to pay off his mortgage.
"In practice however it meant a) disinterested staff b) no push back if a design, requirement or request was ambiguous or contradictory c) no proactivity or initiative d) wasted conference calls because they could barely speak English. Productivity went so far down the toilet so that the money saved in billing rates was lost through project overruns, retraining and substandard code."
a) disinterested staff
really? brown tinted opinion or fact? and what does this have to do with the staff being in india?
b) no push back
as an indian, i did face a similar situation. in my case i pushed back and pushed back hard *after* i "took the initiative" studied the plan, knew it was wrong, built up a supporting case and then i pushed back. so yep it does happen in india, maybe you were just unlucky i guess.
c) no proactivity or initiative
duh! again opinion or fact? see the above, maybe you're just unlucky.
d) they could barely speak English
did you stop and think about how daft that statement makes you sound? was it india? really? last time i checked, every one in my office could speak english. i work in semiconductors but that should not be too much of a difference. unless you're just plain unlucky when it comes to the people you meet. with your luck, i wonder, have you ever.... nah! never mind!
"brown tinted opinion or fact?" Nice bandwagon...
Actually those points you refute sound pretty damned accurate to me...and yes, Id imagine semiconductors are different to software for one very good reason.
ANYONE can sit in front of a keyboard and bang keys. After a few weeks training ANYONE can start to churn out poor quality code. I'd imagine designing chips needs a different skillset.
Case in point. I worked on a project where a webpage had usernames and passwords included as comments -plaintext within the HTML. We shipped that release back FIVE TIMES before that very, very simple issue was fixed.
Different cultures, timeszone and languages can make working with offshore staff very hard. Whats made even harder is a lot of outsourcing companies will apparently employ anyone who can get the keyboard the right way round nine time out of ten as an experienced developer.
Jobs are going both in the UK and overseas. This suggests that there's an overall downscaling, not a shift of jobs offshore.
Without knowledge of current totals of each and therefore assessment of %age of each workforce cut, it's impossible to say whether there's also a rebalancing between the two.
When hiring journos, does elReg not employ some assessment of their logical thinking capabilities (what am I *thinking* - they're journos).
I con confirm that they are amongst the keenest to outsource IT work to India. The standard of work is as rubbish as Commentards above have said but at least it's cheap!
P.S. Lloyds weren't pushed to take over HBOS, they have been gagging to expand in the UK for years, anyone remember them nearly paying 19 Billion pounds for Abbey? That was only stopped by the competition commission, Santander snapped them up for less than a billion a couple of years later, Lloyds have got a lot of form in the dodgy acquisitions game....
If a company the size of Lloyds has 4,500 IT people it can just drop then I'd say there are serious issues as to how the company is run. I mean, no matter how many branches they have the software/kit should be the same and hence scalable as they're all offering the same product suite. I thought IB's could be heavy on IT staff at times but to be able to shift 4,500 IT people and keep functioning is something truly special. That is the sign of one really badly run company.
AC writes
> I left LLOYDS this year (both current and savings account).
> ... Halifax pays the best rates at the moment, so I signed up with them
then a quick reminder from the article
> Lloyds Banking Group is cutting 4,500 jobs from its IT department as
> part of its integration of Halifax and Bank of Scotland.
case of out of the frying pan and into the fire I think. Wait till they do a account merger a la Santader and see what happens then!
Companies that send jobs overseas. The only way to prevent these job losses is to make it as expensive to offshore as it is to employ locally, the we'll see how efficient off shoring really is. I know this means the government interfering in private industry but I don't see another way,
I wonder what companies are thinking when they do this, effectively banks are cutting there own customer pool, because no new jobs magically appear for the people laid off, which means less taxes and increased spending for the government and worse public image for the companies performing the off shoring.
I'm all for investing in staffing for a market you are participating in but to shift jobs to another country just because its cheaper doesn't show any form of social conscience from the company.
This is not because offshoring is occuring, this is because the integration of the bank is nearing completion and there is no work for the staff anymore.
Note that a lot of offshore jobs are being removed as well, so everyone should probably get off the offshoring band wagon now.
I agree with your sentiment, but wouldn't taxing these companies simply force them to move their 'base' location? Ie. it's not offshoring if you declare that it's now an Indian company, that just happens to have some senior staff in an office in London. That would surely result in even less UK jobs?
Parsifal,
while I agree with your sentiment, I don't agree with the communistic view that government should step in to persuade companies not to move jobs off-shore via taxing, or any other means.
Business is business, and as business goes nowadays it is driven by quarterly earnings and shareholders wanting money. And that, I'm afraid, is the biggest problem. There is, thusly, no longterm view amongst the managers.
We, the plebs, can do a couple of things nowadays, as we do have our own marketing tools available to us (and some of the readers don't agree with this): Use twitter / facebook and launch a black campaign regarding how the company upholds/behaves itself. If/when you get a sentiment out there that a certain company is not good, people will follow that, and the company in question may loose customers to better performers.
I, for one, will never want to use a company that uses off-shored non-native English helpdesk staff.
I, as a private business owner, will never off-shore any jobs to a cheaper country for several reasons, the main ones being:
1) Quality of work vs cost overruns;
2) You will have to keep up with shifting the work *for the rest of time*.
The best way for government to act upon this stuff is:
1) Create and promote *good* IT learning centres, akin MIT but with a more affordable tuition model;
2) Reduce income tax / social security rates and maintain government income through other means (for example through the criminal / justice system); this will make owning a workforce more affordable and should help people to get jobs;
3) Account fairly and openly to make the public understand how money is laundered from department to department within the government.
4) Setup a similar system as in Germany where job roles are quantified by law, i.e. to call yourself an IT expert you have to have this that and the other qualification; and further enhance that system by setting sensible guidelines for job/employment contracts (e.g. a link between age, time in job, experience and salary); this could then also be applied to people working in the UK industry from abroad (more or less akin US law enforcement which also applies to all the other 6.2 billion people that have nothing to do with the US);
5) Be more inline with what the industry at large needs, and provide means to educate masses quickly, should a need for certain professions arise. This would be similar to the Dutch model regarding IT workers in 1996/1997/1998 where there was a huge demand, not enough students, and semi-qualified scientists (chemists, mathematicians, physicians, etc.) could cheaply and quickly re-school or re-educate themselves for a bachelor degree in IT, so as to meet the industrial demand. With this, the government would provide insentives to companies to hire these people, akin first-year tax/social security reductions or other "sales" campaigns;
I guess, I'm running out of time, but there are other ideas that could play well. Tell Vince to give me a call :-D
Pick and choose: it's all been done before... Just look / listen and be brave enough to put your Balls (not Ed, nor his brother) on the table.
Regards,
Guus
Problem is that sporting boards are dealing with teams that are supposed to be representing UK places, but many of these businesses are global.
My company, for example, employs 120,000 people worldwide in 60+ countries, but only around 11,000 of them in the UK. How would you fairly limit the percentage?
I should point out that for the work outside of the UK almost none of it was *ever* done in the UK and in many cases it would be impractical to move it to the UK (e.g. customer engineers).
The wife works for part of Lloyds group, whilst I work in IT for one of the opposition. We complain enough about all our support being offshore (and it seems everything else), but generally, it works, even if we have to tell them at times what to because we aren't allowed to do it ourselves any more!
Judging by the stories she comes back with of a week spent unable even to log on because support can't fix profiles, having to come out of one system because another system won't work if you're logged in to it, I can't see things getting any better for the branch and back office staff.
If the person from what's now Lloyds who I meet on a .Net course the other year is anything to go by, it may explain a few things. She spent more time commenting on Flickr photos and Facebook pages than learning what she'd been sent to learn.
As for the poor souls with the P45s, I fully expect to join you within the next couple of years!
the person you met on the .net course, who spent all their time on Facebook, Flickr, twitter, picking their nose, will be just the sort of person who comes out of this unscathed!
There is a trend in Lloyds/HBOS that any actual technical ability is classed a secondary skill, doing newsletters, arranging nights out, doing posters, etc. are the primary skills they appear to want in their technical IT staff.
These low skill operators out there all have at least one degree and about 10 MS, IBM and SAP qualifications to boot.
I worked with a lady from India that spend 6 months in this country away from her young family just to learn our systems. That is a level of commitment which I have never seen in the UK. Lucky for us she was a exception. I don't think the indians would listen to the 'I have to leave early to pick up the kids' story too often.
Thank god for us most of the stories are bad or else we would all be flipping burgers in McD's
I work for Scottish Widows in IT. I expect us to suffer a similar fate within the next 12 - 18 months. Our application support is outsourced to Tata Consultancy in India so I'd expect them to take a bit of a hit. Rumour is that our platform team will be getting outsourced and they are already ditching the current desktop support contractor. Fun times ahead. God I hate Lloyds.
These announcements mean that the ratio of insource staff to outsourced will fall.
It wouldn't be so bad if the work was good, but it's not.
The initial developement (outsourced) is full of bugs, the testing (also outsourced) is virtually non existant.
How can you roll out a major update to the whole branch network and still have bugs like not being able to enter an account number into an account number field?
Their new online offering was is costly to develop and run has far fewer features than the cheaper, more reliable HBOS system they will throw away soon. Customer concerns are dismissed with a "They'll get used to it" attitude.
This is an organisation that rolls out out a major customer facing app that started life with a 70% failure rate in live usage and think it;s an acheivement that it now only fails 10% of the time.
LLoyds will squander the opportunity to create something good. They have slip down the ranks of the big 4 only to be boosted back up by acquiring a rival in the past, they then slipped down again and have only become no 1 once more(in customer volumes) again by acquiring a rival. They've shown no sign of changing and quote "defender position" whenever they make decisions detrimental to HBOS services.
Those customers are not the same demographics as Lloyds (and they have research to prove it) yet they ignore that. Those customers will walk once the full range of cuts in services start to hit them.
AC as is need to pay my bills
I also work there, but from your comments I suspect from another heritage... Your comments about testing are inaccurate. Period. I know the numbers on this, and huge amounts of testing are being done under tight timescales, so facts right. Let's be clear - if HBoS was so wonderful, it wouldn't have gone TU at the cost of all our savings (via plummeting share price). I know this wasn't the 'fault' of IT, but cost of delivery is much lower now than it was.
As an RBSer in a whose job may well be going off-shore (many of these jobs at Lloyds will be moved offshore) I sympathise and say to Lloyds guys in the same situation:
This is done with approval of the government, so: Write a letter to your MP and to Vince Cable. Point out that making UK tax payers redundant by moving their jobs offshore at an institution that is only in business because of a UK tax payer bailout in outrageous. To add insult to injury, these guys may well end up on the dole, adding more costs to the UK tax payer in addition to lost tax revenue.
</angry>
I tried that when my job was being outsourced - MPs don't give a monkeys mate, as long as they can still fill their snouts at the trough, safe in the knowledge that it's not their jobs being outsourced.
By the way, if you're at RBS, it's likely the same "Programme Manager" that outsourced my job is outsourcing yours - initials HW Perhaps? - if it's the same guy, he's a one trick pony, all he knows how to do is outsource, has a deep distrust of in-house IT (especially development/support) departments, and will likely cut-and-run to "another contract" before any of you actually get shown the door. He's not the kind of person who will see things through to the end, but happily leave RBS in the shit after taking his generous pay.... Caveat Emptor...
When I saw 4,500 IT jobs going, as that would flood the market and push down salaries even more.
Then I saw that 1,600 were in India, leaving 2,900 IT staff coming onto the market.
Then I realised which company it was and relaxed, as there's about 500 competent ones being 'released', tops, based on what I've seen from this group, as the rest are glorified spreadsheet jockeys (sorry, Business Analysts and IT Project Managers)!
They've been pissing off developers for months in an attempt to get them to leave, they're given pointless paper pushing exercises and told in no uncertain terms that all development will be offshored leaving a handful of system experts delegating the work.
A lot, including me have jumped, leaving system support very thin on the ground, how I laughed when I got a text 2 weeks later about a broken server!
We (IT Division of multinational Manufacturer) outsourced our Development to India 2 years ago; half the price, quarter of the quality.
As a general rule, the non-European staff are extremely loathe to speak up about problems, as this is seen as being negative and disloyal. So major issues sit and fester until the last minute then blow up in our face.
Does this match with other peoples experience or is it a corporate rather than cultural issue?
I see the same reluctance to challenge issues in another UK bank IT Project, only that reluctance is very much a domestic issue. Anyone who dares suggest that the current approach or design is in any way lacking is given one chance to kow-tow and shown the door if they dare do it again.
We, the remaining wet robots, just hunker down and take the pain and humiliation in exchange for our £££. Utterly soul destroying.
@AC, yes there are cultural differences. However have you considered that if you *know* this, you should operate differently? Having managed offshore staff in the past, you quickly learn to pose questions differently. Less closed questions, more open questions. More "when can you?" and less "can you?".
"Yes" means "I understand", not agreement. If you're telling me that over the space of two years, you recognise the symptom and assume doom, but haven't learnt how to adapt to it, then frankly I'm amazed you're still employed.
A lot of Indians I've experienced seem to be loath to admit that they can't handle something personally. A slightly different slant on the "disloyal" suggestion.
In some ways it is nice that someone takes a personal responsibility, BUT:
It can be annoying when you, as a customer, realise it's not going to be resolvable by a person at their level but you can't get them to transfer you to someone more senior who can make the change you want.
Which also agrees with your point of view that problems get sat on until something blows and it has to be escalated.
My suggestion is to put on a lot more excess pressure in the first place compared to talking to a Brit. Instead of "this might cause a problem if ...." try "This is causing major problems right now"
Of course, if it's a problem you aren't aware of, then you're screwed...
All US people let go. Cost of everything(IT wise) sky rockets. Fibre to India is NOT cheap. New crew in India are clueless, application issues sky rocket, system outages cause bad customer relations and on and on. The senior VP is set out to pasteur new VP is in way over his head. Then bank is bought out by another US bank. <fade out>
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
