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Lloyds To 'Offshore' 2,000 Jobs In IBM Data Center Outsourcing Deal (thestack.com)

Posted by BeauHD on from the wait-and-see dept.

In early January, IBM announced a roughly $1.6 billion outsourcing deal with Lloyds Banking Group. IBM would pay Lloyds for its data center assets and in return will charge the bank for ongoing management. Today, Lloyds plans to move almost 2,000 members of staff to U.S. tech giant IBM as part of the IT outsourcing deal. An anonymous Slashdot reader shares a report from The Stack: The seven-year deal hopes to save the bank close to $930 million in costs, streamline the business and make its IT services more agile. Lloyds Trade Union (LTU), which represents around 35,000 members of staff, now "derecognized" by the bank, claimed in a newsletter that once the deal is signed the jobs would be "offshored" over a four-year period. It added that most of the 1,961 positions would be cut. "1,961 staff will be transferred to IBM including permanent staff, contractors, 3rd parties and offshore suppliers. However after 4 years, only 193 of the staff transferred to IBM will still be working on the LBG contract," wrote LTU.

63 comments

  1. The future is bleak for IT by Anonymous Coward · · Score: 0

    So bleak...

  2. and 6000 IBM Indian IT workers got new jobs by Anonymous Coward · · Score: 0

    Good news for India, of course they will all be 4.0 IIT grads right?

    1. Re:and 6000 IBM Indian IT workers got new jobs by freeze128 · · Score: 1

      Wait a minute. Didn't Lloyds say they were offshoring *TO* the United States? I know offshoring usually is bad, but in this case it's good for the U.S., right?

    2. Re:and 6000 IBM Indian IT workers got new jobs by ChumpBait · · Score: 2

      Yep. Nothing but masters degrees as far as the eye can see.

    3. Re:and 6000 IBM Indian IT workers got new jobs by bobbied · · Score: 1

      Sure, until IBM offshores it.. (after taking their slice of the pie)

      --
      "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
    4. Re:and 6000 IBM Indian IT workers got new jobs by Anonymous Coward · · Score: 1

      Outsourcing to a US company does not mean the actual work will be done by Americans.

    5. Re:and 6000 IBM Indian IT workers got new jobs by Anonymous Coward · · Score: 0

      Completed in only 6 weeks, all with the same name from a school that doesn't have a web site.

    6. Re:and 6000 IBM Indian IT workers got new jobs by Hognoxious · · Score: 1

      No idea, it doesn't really say.

      But if you're expecting an informative summary, you probably want room 12A. It's right next door.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    7. Re:and 6000 IBM Indian IT workers got new jobs by bobbied · · Score: 1

      From the "Close cover before striking" School of IT Skills?

      --
      "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
    8. Re:and 6000 IBM Indian IT workers got new jobs by rholtzjr · · Score: 1

      I do not think so. They said that would take over managing the two bank data centers and then eventually offshore over a four year period.
      But wait, there is a new IBM data center opening in India. Coincidence?

    9. Re:and 6000 IBM Indian IT workers got new jobs by elrous0 · · Score: 1

      They're offshoring it to the U.S., where the jobs will be done by H-1B's from India. USA! USA! USA!

      --
      SJW: Someone who has run out of real oppression, and has to fake it.
  3. go short lloyds by Anonymous Coward · · Score: 3, Insightful

    The just put their entire operation at the mercy of another company and whatever whim they take on pricing.

    1. Re:go short lloyds by Anonymous Coward · · Score: 0

      But their executives will walk away with massive compensation for making the deal, so it all evens out!

    2. Re:go short lloyds by Anonymous Coward · · Score: 0

      Funny you say that, their shares have dropped 2.83% today.

    3. Re:go short lloyds by Anonymous Coward · · Score: 0

      I work in a bank too, and we had the same exact arrangement with them. As you said we are at the mercy of IBM, which certainly doesn't have the outmost interest of being profitable for us, or being efficient or "agile" as they said.

      It really a marriage in Hell.

    4. Re:go short lloyds by thegarbz · · Score: 1

      You're implying that they themselves were more suited to handle the process than this other company. I mean really it's hardly any different to when I get an electrician in. Sure he could burn my house down, but really I'm far more likely to burn it down if I don't call him.

      Ok so now that the logical through on the generalisation is aside.

      Go short lloyds, they just put their entire operation at the mercy of IBfuckingpayusmoremoneyM

  4. International by turkeydance · · Score: 1

    Business Machines. no lie.

  5. End result of unionization by Anonymous Coward · · Score: 1

    Sometimes it takes a bit longer, but eventually greedy employees who unionize end up out of a job. Union employees spend half their workday calculating how many more sick days they're entitled to, and ironically discover that Indians don't get sick.

    1. Re:End result of unionization by Anonymous Coward · · Score: 0

      To be fair, not ALL unions do this kind of thing. There are a few which are actually interested in the long term health of the companies they provide labor for. Now I've only known one union shop with that attitude so I figure there are a few more about. However, most of the rest are exactly what you claim, they will rive the company into the ground with benefit costs and low quality workmanship then go on strike whenever the company asks for concessions to be competitive in the market.

      They literally kill the goose that lays the golden eggs to get that last egg, then gripe abut "union busting" when the shop goes down the financial tubes....

    2. Re: End result of unionization by cyber-vandal · · Score: 1

      Selfish bastards wanting secure employment and disposable income. Tell me Mr Economist, in an economy that depends on people buying things, what happens when there aren't enough "greedy people"?

    3. Re:End result of unionization by Anonymous Coward · · Score: 0

      Oh, fuck off. Unions help employees but they can't do much about companies deciding they'd rather pay workers below US minimum wage in much poorer countries.

      Where unions don't exist, employers are able to fire at will over anything they wish or for absolutely no reason at all, can demand employees consistently work far beyond their contracted hours, can pay employees different wages/salaries based on how well the employee was able to negotiate, if they even did, during the hiring process or where they're from (H1B visas). Employees are most vulnerable to high exploitation by employers when the economy is weaker or their particular job field is over saturated with talent.

      Do you really think the people at the top of these companies have the best interest of most of their workers at heart? They look at the employees like robots, how much productivity can they get out of them for as little as possible (per hour).

    4. Re:End result of unionization by bobbied · · Score: 1, Interesting

      Many believe that Unions have out lived their usefulness. We have labor laws, health and safety laws for the work place and the minimum wage, all things that Unions initially had to fight for, but now the government enforces these things at the federal and state level.

      Personally, Unions have never done me any good, but my profession is not usually unionized anyway. That being said, I think they are of marginal utility and I'm not sure the good they manage is worth the political baggage they bring to the work place. In my view Unions have become obsessed with political power and have left their primary purpose of representing labor and negotiating for worker's interests with management. They have forsaken their original role and have parlayed their money from dues and influence on the membership's voting habits into political power.

      I'm not advocating that unions be done away with, but I generally do not support them and would not want to work under one. Unfortunately for Unions, this is becoming the majority opinion and they have failed most of their efforts to unionize non-union shops over the last decade. So, it seems that they will be dying out to me.

      --
      "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
    5. Re:End result of unionization by Anonymous Coward · · Score: 0

      Union or not is irrelevant when the whole shop goes over seas. When manufacturing was big, union membership was up. I'm sure there are still quite a few jobs where unions still have a place. In crazy California, we have a grocery retail union that also extends into all bordering states and even into the midwest. Safeway/Albertsons/Vons all the same. Working there I have significantly better benefits then if I were across the street at Target, Whole Foods, Sprouts or any other non union retailer.

      Many Costco shops are union as well. The ones that aren't union are structured in the same way regarding wages, so the non-union shops still benefit from the shops that are Union.

      I would worry more over my job going away to automation, but all my over 50 customers can't even use self check and the over 60 shop there because they want to socialize with the staff. You get rid of the staff and open no employer amazon stores and you will a huge amount of those customers. Sure, the people serving people fade may become a niche thing until everyone that likes talking to people die off. I'll be retired before that happens.

    6. Re: End result of unionization by Anonymous Coward · · Score: 0

      I am starting to think companies have also outlived their usefulness. We need a new a paradigm.

    7. Re:End result of unionization by Anonymous Coward · · Score: 0

      Unions are simply parasites sucking the blood from their hosts (the business) while claiming they are doing "good" for the workers. Unfortunately, as with most parasites, they end up killing the host which they then disconnect from when it's dead and go look for a new host (victim).

    8. Re:End result of unionization by Anonymous Coward · · Score: 0

      Many believe that Unions have out lived their usefulness. We have labor laws, health and safety laws for the work place and the minimum wage, all things that Unions initially had to fight for, but now the government enforces these things at the federal and state level.

      Except there are plenty of people who want to get rid of all those pesky regulations that make people's lives better but get in the way of profit. You've just elected one as president. They've been less necessary until now, but I think they're going to be needed in the next few years to fight to maintain those laws.

  6. Offshore may just mean from the UK to US (IBM HQ) by Anonymous Coward · · Score: 0

    Lloyds is based in the UK, so "offshoring" doesn't tell us much. The LTU letter does not state specifically where the jobs are going to be offshored to, but does not mention India. Of course, either way this is a bummer to Lloyd's IT staff in the UK.

  7. Fear the WRATH OF TRUMP by Anonymous Coward · · Score: 0

    For he is the redeemer of sin, and sinned IBM has.

  8. What is this fascination with outsourcing? by linuxguy · · Score: 1

    How many outsourcing stories do we need?

    Outsourcing is happening. Deal with it. Move on. Change plans if necessary. Complaining about it on Salshdot accomplishes nothing.

    IBM outsources to low cost geos. And that is what will happen to Lloyds jobs. Anybody that believes otherwise is not thinking clearly.

    Businesses will go where the costs of getting work done is lower. You can erect barriers all you want, but all of that is going to be temporary.

    1. Re:What is this fascination with outsourcing? by Anonymous Coward · · Score: 0

      And how would you know that specific companies are outsourcing if they were not in the news?

      Someone here is certainly not thinking clearly, and they want to work a bash line from some tropical hellhole for $10 a day. Hell, you seem excited and grateful to do it.

    2. Re:What is this fascination with outsourcing? by rmdingler · · Score: 1
      Complaining about outsourcing is happening. Deal with it. Move on. Change plans if necessary. Complaining about it on Slashdot accomplishes nothing.

      Anybody that believes otherwise is not thinking clearly.

      It is also plausible anybody that believes otherwise is not thinking exactly like I do.

      --
      Happiness in intelligent people is the rarest thing I know.

      Ernest Hemingway

    3. Re:What is this fascination with outsourcing? by Anonymous Coward · · Score: 0

      You feckin-A yob! Pedophiling happens .... whorinizing happens, krankizing happens, fagotizing happens ... outsourcitized happens ... raperizing happens ... words not too difficult for you 'eh hozzer? Do you just deal with those evils , or put a bullet in-the-head of AMAP A-level pimps reaping the benefits? Shoot them dead and kick bodies into the gutter for dogs to chew. Good result. Shit stops. Fast. Evil scum get scared - - then bled-out. Genes dead-end. Herd culled! Entire families of aquizitators get genocided. How cool. Pardon liberties with the Queens spelling.

    4. Re:What is this fascination with outsourcing? by Anonymous Coward · · Score: 0

      This.

      First off, Lloyds is in an economic downturn, and more than likely have made this decision since they basically have few choices on how to cut staff. Financial companies are mostly accountants and IT staff, and outsourcing the IT staff looks better on paper than outsourcing accountants. If you want to know how we're still feeling the fall-out of the 2008 crash, this is where it's at. If you work for a public company, watch the 8k filings, and if you start seeing things like downgrades, begin looking for work. If your boss asks, sit down with them. "Every time a financial company gets into distress, IT gets outsourced. I've decided it's time to move on while the getting is good. You should too."

      The harder you push the political pendulum, the harder it swings back. Push it too far to the extreme, and people radicalize to the point unrest becomes inevitable. Globalists and Corporations have pushed the pendulum as hard as they can in order to line their pockets and now, it's swinging back. I happen to believe very strongly we'll have a moderate society at the end of the day, and fewer "lessons learned' here E.G. the Chinese workers deciding that death for the executive managers that over-worked them and didn't pay when the company went bankrupt them is best for everyone involved.

      Society doesn't benefit from these kinds of deals. This is 100% money grubbing globalism at it's finest, and we are rapidly approaching a world where globalism and financialization will be dead. And when it's dead, then and only then can the world begin to come together.

    5. Re:What is this fascination with outsourcing? by rsborg · · Score: 1

      How many outsourcing stories do we need?

      Outsourcing is happening. Deal with it. Move on. Change plans if necessary. Complaining about it on Salshdot accomplishes nothing.

      IBM outsources to low cost geos. And that is what will happen to Lloyds jobs. Anybody that believes otherwise is not thinking clearly.

      Businesses will go where the costs of getting work done is lower. You can erect barriers all you want, but all of that is going to be temporary.

      In other news, linuxguy has been outsourced - any new comments will be from a completely different person. Expect quality to remain the same (exuberantly intoxicated) or better.

      --
      Make sure everyone's vote counts: Verified Voting
    6. Re:What is this fascination with outsourcing? by Anonymous Coward · · Score: 0

      I'm going to outsource my work for pennies to a labour camp in North Korea. I'll be the laziest and most productive employee in the business! :)

    7. Re:What is this fascination with outsourcing? by rtb61 · · Score: 1

      Say what?!? Crapping on about out sourcing is great fun because regardless of all the marketing bullshit, we will be able to scream out 'I TOLD YOU SO' and laugh. For that alone it is worth it and we will be saying, I told you so and we will be laughing. Stupid is as stupid does and those outsources will know more about your companies than you do and they will insider trade and they will pass the information off to competitors (via the corrupt executive team).

      Once you can afford a team, you create one, you only really outsource the overload, to keep your staff busy and active. Else your start paying through the nose and losing huge amounts of staff labour, as each contact has to be paid for and people need to be first available and then make their way across the city and then park and then find you (instead of taking elevator from basement and walking down corridor) and the executives can no longer rely on privacy when they hand over their broken contaminated notebooks.

      This before said outsourcers start doing bean counter spreadsheets and implementing shorts cuts and unknown nobodies turn up at your door because they are cheap. Idiots will look at lame spreadsheets that do not properly analyse risks because that is real hard and some executive is due for retirement and is looking to pump up their bonus with stupid savings and who gives a fuck what happens after they are gone. Save a penny to spend a pound http://idioms.thefreedictionar....

      We should run betting book on how long it will take to blow up in those idiots faces (I'd bet not much more than three years, although complaints will start pretty early on).

      --
      Chaos - everything, everywhere, everywhen
    8. Re:What is this fascination with outsourcing? by Bert64 · · Score: 1

      The amusing thing is how short sighted this is...
      When you outsource all your work to poorer countries, who's going to be left with enough money to buy your products at home?
      And as conditions improve in those poorer countries, they will start demanding higher wages too.

      --
      http://spamdecoy.net - free throwaway anonymous email - avoid spam!
    9. Re:What is this fascination with outsourcing? by Anonymous Coward · · Score: 0

      By that logic, open source is the biggest depressor of wages..
      lols

  9. Re:Offshore may just mean from the UK to US (IBM H by jeauxkewl · · Score: 5, Informative

    Nice try. IBM continues to cut US headcount like there is no tomorrow. I spent 11 years with them, this is their mode of operation. They sign a deal like this, agree to take the headcount and then rapidly move the work to low cost countries. Think about it - if the customer expects to see 40% savings, where do you think it comes from? Mark my word, IBM will transition the acquired employees as fast as they can in order to maximize profit. Lloyds has essentially traded their "known" for freshers in low cost countries and IBM is their hatchet man so they don't look bad to their customers/employees.

  10. outsourcing might work here by Anonymous Coward · · Score: 0

    I'm wondering if this is one of those cases, where the outsourcee is indeed more efficient at doing IT, instead of merely hiring people in low wage countries. Maybe IBM has all sorts of proprietary scripts, and tools for managing datacenters.

  11. Soylent Blue . . . ?!?!?! by PolygamousRanchKid+ · · Score: 1, Insightful

    "1,961 staff will be transferred to IBM including permanent staff, contractors, 3rd parties and offshore suppliers. However after 4 years, only 193 of the staff transferred to IBM will still be working on the LBG contract,"

    So, wait, what will happen to the other 1,768 . . . ?

    Oh, no! Soylent Blue is made of offshored IT staff!

    --
    Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
    1. Re:Soylent Blue . . . ?!?!?! by felixrising · · Score: 1

      They will be "resource allocated"... which everyone else calls "made redundant". These deals always guarantee retention of staff for a set time period, with them working on the account until transformation is complete (i.e. outsourcing to China/India).. after that, only a few key staff are retained on the account for a period of 2 years or so, and then after that.. it's anyone's guess. Don't expect any of the original jobs to be retained by IBM in-country more than a few years.. they're still aggressively "resource allocating" to cheap geographic regions with ongoing targets like 10% reduction of in-country workforce each year... Saying that these deals with make the company more "agile" is a total joke. IBM is heavy on process, it's slow and clunky and highly siloed. But what the bank will get is some vigorous process and associated results... but agile... hope you like 3+ month turn around on new physical servers....

    2. Re:Soylent Blue . . . ?!?!?! by Anonymous Coward · · Score: 0

      This is very accurate. Cutting to the bone and no more agility, this exact thing happened where I worked back in 2004, as soon as it happened all the good people started leaving rapidly. I still know people there on the business side and it takes forever to get anything done. I had a boss there that was outsourced to IBM 4 times. When I was working for him we all got outsourced to Accenture. I would never work with him again, although he is a very nice guy, but has really bad luck. IBM didn't lay him off but all the good people that were outsourced in that position find a different job after being transferred, all the dead weight probably get out of IT since there weren't very good at it, most had joined IT in the dotcom boom and didn't know a lot about IT.

    3. Re:Soylent Blue . . . ?!?!?! by Anonymous Coward · · Score: 0

      Don't worry, IBM is going to put it all in softlayer at which point, they'll get ... nine fives of up time, and the agile part will be how quickly they move to the cloud and ditch colo's.

  12. Don't these guys ever learn? by Anonymous Coward · · Score: 2, Interesting

    You'd think by now everyone would know better than to outsource to IBM. JPMorgan outsourced to IBM and then brought back support in-house not once, not twice but **THREE** times before they learned their lesson. I guess whomever got the kickback for those outsourcing deals is now working at Lloyds.

    Besides, IBM is notorious for coming in cheap and then making back their money by nickel and dime'n you later once you request for things not in the original contract, all the while you suffer with poor service.

    1. Re: Don't these guys ever learn? by Anonymous Coward · · Score: 0

      This last bit exactly ! Winning on a unrealistic price and inventing 'specialist' work to up the price at a later point. In my case helped with the customers management help because work almost came to a halt. So atrocious service for over a year followed by a higher price later.

  13. Mutually exclusive by Anonymous Coward · · Score: 0

    " ... seven-year deal hopes to save the bank close to $930 million in costs, streamline the business and make its IT services more agile."

    Its highly unlikely to see words "save", "streamline" and "agile" used in the same sentence as IBM. They seem to be mutually exclusive for some reason.

  14. self check can't do 18 and 21 only item's and it's by Joe_Dragon · · Score: 1

    self check can't do 18 and 21 only item's without staff and it's very easy to shop lift and under ring at them.
    Can't do wic or food stamps in some states.

  15. Ibm will make redundant by Anonymous Coward · · Score: 1

    Ibm has a long history of this. They will get the Americans to train the Indians on the promise they will be moved into other positions in the company. Little do they know..Ibm has no staff. They are all outsourced so the 100 jobs in IBM america available, for the 2000 staff won't work. So IBM will make them all redundant on packages for employment time with IBM....Not Lloyd's. Long serving employees will lose thousands of dollars.

  16. good luck with that by Anonymous Coward · · Score: 1

    I have been involved 2 times with ibm and work that was outsourced to them.
    Both times it was a total clusterfuck on all levels. All ibm seems to care about is sending out bills period. When contacted about subpar quality of work, missed deadlines or not delivering personnel with the expertise the customer required the customer fell into a swamp of petty excuses, changing service management and so on.
    I do not want anything to do with ibm ever !

  17. Lol.. you want your software free by Anonymous Coward · · Score: 0

    free free free... everything should be free. Free movies, free music, free everything.. no data caps on anything .. unlimited everything, free free free ! You don't want to pay for anything.

    And then, you want corporations to pay *YOU* more than what you're worth on the global labor market.

  18. Been There, Done That, Dumped IBM by Anonymous Coward · · Score: 0

    Lloyds had better put some damn solid performance metrics into their contract. IBM took over my employer's IT operations, fucked it over completely. We had ironclad performance terms specified in our contract.
    After horrific performance on IBM's part, we had to take it back, restore it from tatters, but fortunately got every penny back. The irony? Our ex-CIO is now an IBM senior VP. Fortunately, the heroes in our IT department who managed the restoration actually got the promotions, raises, and bonuses they deserved.

  19. Re:self check can't do 18 and 21 only item's and i by Bert64 · · Score: 1

    Not yet they can't, but how long before they integrate similar checks to what you have at automated passport gates in airports?

    --
    http://spamdecoy.net - free throwaway anonymous email - avoid spam!
  20. Re:Offshore may just mean from the UK to US (IBM H by Anonymous Coward · · Score: 1

    When State Street Bank outsourced their IT division to IBM, the European IT staff became IBM employees whose first task was to train up teams in Poland and India to support European operations. Then they were up for "re-deployment". I'm not sure how many are still IBM employees, I know I'm not.

  21. Countdown to catastrophe at Lloyd's begins.... by CaptainOfSpray · · Score: 1

    We can expect a replay of the Royal Bank of Scotland disaster. RBS got rid of 1500 staff who knew what they were doing, and replaced them with 750 outsourced amateurs. Result? A bollixed-up overnight batch, a fucked-up recovery, all banking services suspended for weeks, £56m fine, permanent loss of reputation.

    Description RBS Disaster

    --
    "Cock Up Your Beaver" does not mean what you think. This sig is intended to clog filters and annoy do-gooders
    1. Re:Countdown to catastrophe at Lloyd's begins.... by Anonymous Coward · · Score: 0

      By the time the shit hits the fan, the executives who started it all will have collected their bonuses and moved on.

  22. This will be expensive... by gweihir · · Score: 1

    Sure, the service will be cheaper, but all those wasted hours, because the IT does not really work anymore and all those competent people that will leave because of this...

    Save a penny, lose a million.

    --
    Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
  23. Re:self check can't do 18 and 21 only item's and i by Joe_Dragon · · Score: 1

    You think that jay's supermarket is going to pay the costs of a DB like that and what about if the sate laws say there must be a real person to do the checks on site?

  24. Re:Offshore may just mean from the UK to US (IBM H by Anonymous Coward · · Score: 0

    However after 4 years, only 193 of the staff transferred to IBM will still be working on the LBG contract

    Yep, it's right there in the summary.

  25. Hahahahahaha by Anonymous Coward · · Score: 0

    Hahahaha "make its IT services more agile", IBM agile!? What a joke! And the clueless offshore morons they get to run these things are like keystone cops falling all over each other. Bonehead move LLoyds!!!

  26. 2000 People? by Anonymous Coward · · Score: 0
    Is it just me or is 2000 a lot of people to take care of the IT needs of a large financial services company?

    I'm curious as to how many layers of management there are and the statistics on how many reports per manager.

  27. Re:self check can't do 18 and 21 only item's and i by zippthorne · · Score: 1

    Amazon is experimenting with that. How long before "Jay's Supermarket" is a 3rd party vendor using Amazon's physical presence package?

    --
    Can you be Even More Awesome?!
  28. Re:self check can't do 18 and 21 only item's and i by Joe_Dragon · · Score: 1

    and if the state Alcohol & Tobacco board say to save jobs that there must be someone on site to check ID's for them to be able to sell it?