David Ramli UPDATED: 27 Apr 2012
St George Bank has hit back at reports that 200 technology staff are to be fired and said that any employees let go would be “no worse off”.
The comments follow reports up to 200 jobs in the IT division are to be outsourced to IBM. Westpac Banking Corp bought St George in 2008.
IBM is just one of many companies benefiting from a shift to outsourcing jobs overseas. It does significant amounts of business in low-cost locations in countries such as India.
According to a statement by Westpac general manager for service delivery infrastructure Gary Sim, no final decision had been made on the fate of its IT workers.
“At this point in time it is a review only and no decision has been made,” he said. “Should we proceed with any changes, jobs will remain in Australia and there are no plans for redundancies.
“The aim would be for staff to transfer across to our service provider and stay within the St George office. If we go ahead, no employee would be worse off.”
The cuts would be the latest in a string of firings that have hit the financial services industry hard. Westpac has signalled plans to slash 560 roles and earlier this month ANZ Banking Group axed 230 staff as part of its plans to cut 1000 positions.
Macquarie’s domestic business cut 626 jobs in the nine months to December 31, and almost 900 staff were dropped globally. Analysts at UBS estimate 7000 jobs could be cut in the financial services sector.
Last month Westpac’s new technology chief, Clive Whincup, said the bank would forge ahead with ambitious IT plans despite redundancies and headcount reductions.
“Our internal flexibility and agility will be hugely improved, but it is a painful process to go through to get there,” he said.
“I am convinced that we will end up with a much more effective, flexible and agile applications environment to work in and I am convinced that it will give us huge benefits in the future.”
Commonwealth Bank of Australia chief executive Ian Narev said recently outsourcing led to poorer customer service and operational risks. He assured staff there were no mass redundancy plans. “In my experience – particularly 10 years of looking at different business cases with offshoring and labour cost arbitrage – the number of disappointments you get with service levels and operational risks on the people who are actually doing this for you overseas, never gets factored well enough into the business cases.” he said.
The Australian Financial Review