IT contractors are facing substantial pay cuts as big companies seek to cut costs. Among the big companies leading the offensive are Barclays Bank, which is to cut IT contractor rates by 20 percent from 1 July, and GlaxoSmithKline, which could be cutting rates by up to 25 percent.
Pam O'Keeffe, a spokesperson for Barclays, told Shout99, a Web site for contract workers, "The cuts will affect around 800 people. It wouldn't be a concern to us if all of our IT contractors walked out over this, obviously we hope they won't, but it wouldn't affect the services or products we offer or our infrastructure as a whole."
The contractors at Barclays Bank have been told to accept a 20 percent rate cut, or have their contract terminated.
O'Keeffe explained that although their contractors offered good value and specialist skill sets, they weigh in at around 1.5 to two times the cost of most of their employees and that they therefore represent an area where the bank group can free up costs. "We are not looking to reduce the amount of contractors but we are happy to renew the contracts at a lower rate."
She added: "We announced we would cut costs across the board by £1bn over four years at the beginning of 2000."
News of the cuts was put on Barclays' Intranet site and sent out on Barclays Globe Radio, which is the bank's in-house radio station. One of those affected told Contractor UK, "Both of these approaches are a disgusting and despicable way to treat professionals."
GlaxoSmithKline (GSK) is the latest major player to have plans to slash IT contractor rates, by up to 25 percent, according to Contractor UK. IT contractors currently working at GSK will undergo rate cuts as the company forces them to change to new 'preferred' supplier agencies, even before their contracts are up for renewal.