Drugs giant in secret talks with IT suppliers

UK-based GlaxoSmithKline, the second-biggest pharmaceuticals company in the world, is having secret talks with large IT suppliers...

UK-based GlaxoSmithKline, the second-biggest pharmaceuticals company in the world, is having secret talks with large IT suppliers about contracting out up to 66,000 desktop systems and the jobs of hundreds of IT staff.

GlaxoSmithKline has made no announcement to staff about the talks; there has been no consultation exercise with them, either formal or informal; and suppliers have refused to discuss the proposals.

One reason the talks are so sensitive is that suppliers have been told not to rule out taking the jobs offshore and making existing IT staff redundant.

A small number of UK employees, who learned of the talks and contacted Computer Weekly, say they feel betrayed that their years of loyal service to the companies, which merged to become GlaxoSmithKline in 2000, could end with their jobs being outsourced.

They also say they are concerned about transferring to service companies, as several of the largest IT suppliers have announced plans to cut thousands of jobs.

But an outsourcing deal could boost GlaxoSmithKline's depressed share price. This has fallen nearly 30% this year from £18 when Glaxo Wellcome merged with SmithKline Beecham, to less than £12 this week.

Last year a survey of FTSE 100 companies by outsourcing consultancy Morgan Chambers found firm evidence that well-managed outsourcing deals boosted a company's share price during an economic downturn.

But in the letter to Computer Weekly, GlaxoSmithKline staff said they were "extremely angry" and that the plans showed a "total disregard" for employees. As they were not supposed know of GlaxoSmithKline's plans they had no direct way of raising their concerns with the company.

The pharmaceutical giant is expected to issue a confidential request for proposals to suppliers shortly. This is similar to an invitation to tender.

Staff said there were no plans to consult them until next year, but this may be brought forward now that news of the talks with suppliers has been leaked.

Peter Skyte, national secretary of Amicus, the union representing many of GlaxoSmithKline's IT staff, said he was particularly upset about announcements where staff first learn of their company's outsourcing proposals when a newspaper or magazine lands on their breakfast table.

"We would expect to see full and early consultations on the matter," he said.

A spokesman for the company said, "GlaxoSmithKline has long made use of external sources to supply some of its IT requirements. This has to do with raising the quality of our services as well as tackling costs. We have asked a number of companies to tell us what they might be able to offer. However, no decision has been made."

To a question about possible IT redundancies, he said that GlaxoSmithKline did not wish to comment.

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