No end in sight for IT job cuts in banking

There is no end to job cuts within banking IT departments on the horizon.

Barclays announced another round of IT job cuts last week, in an attempt to "increase operational efficiency".

An internal Barclays e-mail revealed that the bank is planning to cut an extra 350 UK technology jobs.

Lloyds TSB, which acquired HBOS last year, announced 650 jobs this week.

Union Unite said Lloyds’ latest job cuts appear to suggest it is embarking on a strategy of “death by a thousand cuts”.

But the insecurity faced by Barclays and Lloyds workers is mirrored across the entire financial services industry.

More job cuts to come

Keith Brooks, general secretary at union Unite, who represents Barclays workers, says, "I do not know when banks are going to stop [cutting jobs]. There is nothing on the horizon to suggest it will stop. All I can see is further hurdles and more job cuts."

Ralph Silva, analyst at Towergroup, says banks are already operating with the minimum number of workers needed.

Nevertheless, up to 7% of IT workers in banks could lose their job this year. "If they have to make cuts, they will close entire businesses," he says.

Swiss bank UBS plans to cut about 10,000 jobs to save up to £2.3bn by the end of next year and is pulling out of businesses. Although it did not give details of where the cuts will be made, the IT jobs that support these functions are likely to be cut.

The Royal Bank of Scotland, which has been one of the major casualties of the current crisis, says it will now focus on the UK retail banking market and sell off other businesses. It is expected to cut thousands of jobs as part of a restructuring that will see it scale back operations and reduce operational costs by £2.5bn.

If one thing is certain in the finance sector it is that there are more job cuts to come. Tough cost-cutting targets combined with lower business volumes will have the inevitable effect of fewer IT workers.