The principle analyst at Ovum, Alex Kwiatkowski, said that \”Whenever you combine businesses there will be rationalisation across all areas. There has been a lot of technology transformation going on in Lloyds over the last five years. They’ve obviously taken a long hard look at how they’re going to run their business. It’s about what synergies they can achieve by combining IT operations and roles and looking at things sensibly without introducing operational risks. Lloyds has already had its fingers burned with accusations of inadequate due diligence for acquiring HBOS and saddling itself with a large amount of bad debt in the effort to grow bigger. It saw a big prize and leapt for it without thinking of the consequences. Lloyds won’t be the only bank making redundancies in their IT function. I can see a lot of excess capacity in other places. When it comes to the challenges that banks face, there’s not going to be some magic loosening of the purse strings.”
The news comes as yet another blow to highly skilled IT contractors working in the banking sector, many of whom have seen opportunities reduce significantly since the beginning of the recession. It is likely that many lower level IT roles will be lost to outsourcing arrangements over the next couple of years as organisations (in particular banks) look to reduce operating costs by moving to lower cost areas such as India. Over the last few years many Indian outsourcing firms such as Tata have become world leaders in outsourcing
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