IBM is considering cutting hundreds of jobs from its UK outsourcing division, Computer Weekly has learnt.
The company has begun to consult staff at its outsourcing division on the proposed job cuts. IBM declined to comment on the number of possible job losses, but staff said that around 650 UK jobs were expected to go.
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The consultation comes after IBM reported quarterly results last month, which fell below analyst expectations.
Although IBM announced a £500m deal with Lloyds TSB last December to supply voice and data services, the company has not featured in recent large multibillion-pound government outsourcing contracts, such as the NHS modernisation or the £4bn IT services contract with the Ministry of Defence.
In March IBM said it planned to axe almost 600 jobs in its business services division in Germany. Most other large outsourcing suppliers have announced jobs losses over the last few years in response to reduced revenue and in an attempt to cut costs.
In a statement, IBM UK said, "IBM is constantly rebalancing its workforce to meet evolving customer needs. IBM is engaging in consultations with employees on how to move decision making closer to our clients and become more productive and faster in the marketplace."
Peter Skyte, national officer for IT union Amicus, said, “In the past IBM has paid lip service to consulting the workforce and we shall be looking very closely at how the company approaches this. We are particularly keen to ensure that highly skilled IT professionals are not made compulsorily redundant.”