Jobs threat as LogicaCMG shifts work offshore

Around 90 UK jobs will go when the IT services giant pushes ahead with plans to relocate software development for its Bristol-based mobile payments unit to an existing office in Bangalore. About 135 UK staff will remain in the Bristol unit.

A spokesman for LogicaCMG said the decision was driven by the need to cut costs across the business and by difficult trading conditions in the mobile payment market.

The move by LogicaCMG, Europe's third largest IT services business, highlights the trend for companies to outsource or relocate IT services offshore to capitalise on cheap and highly skilled labour.

However, union leaders have raised concerns over the impact of offshore development on the UK workforce and warned that companies could face strike action over their plans.

The European market for offshore outsourcing will grow by more than 40% in 2003, according to analyst firm Gartner.

LogicaCMG will consult with staff for three months over the Indian relocation plan, which has been announced internally.

In March LogicaCMG, formed by the merger last December between IT services firms Logica and CMG, predicted that it would have to cut 2,000 jobs globally by the end of 2003.