Dixons is on the verge of outsourcing its internal IT support in a bid to improve the service and save cash.

Although contract negotiations have yet to be finalised, IT support services outfit LogicaCMG has been tipped as front runner for the deal.

And according to insiders, the paperwork could be inked by the end of the month ready for LogicaCMG to take over from the beginning of June.

What exactly will happen to the 400 IT staff who provide computer support services to 29,000 Dixons staff remains unclear, although it's understood they are likely to be transferred to LogicaCMG under TUPE (Transfer of Undertakings Protection of Employment) regulations.

Dixons Stores group (DSG) - which includes high street retailers Dixons, Currys, The Link and PC World among its stable of companies - acknowledged that a review of its IT support services had begun in April, but described claims that it was planning to outsource the function to LogicaCMG as "premature".

Instead, Dixons is mulling whether to restructure or outsource the service. A spokesman for the company told us: "No decision has been made as yet."

And while he wouldn't comment on whether LogicaCMG was in the frame, he admitted that DSG had "looked at a number of suppliers".

Last year DSG - which is looking to expand overseas after reporting tough trading conditions in the UK - outsourced the running of its call centre in Sheffield to Capita. ®

Related storiesM

Ex-Dixons staff 'kicked in the teeth' (http://www.theregister.co.uk/2004/04/29/dixons_capita_redundancies/)
60 face axe at Dixons call centre (http://www.theregister.co.uk/2004/04/26/capita_dixons_tupe/)
Dixons, Capita in call centre talks (http://www.theregister.co.uk/2003/11/26/dixons_capita_in_call_centre/)
Weak consumer spending hits Dixons (http://www.channelregister.co.uk/2005/05/11/dixons_spending/)
Fusing the desktop with non standard kgs (http://www.theregister.co.uk/2005/04/29/letters_2904/)
Dixons embarks on mega Euro expansion (http://www.channelregister.co.uk/2005/04/27/dixons_euro_expansion/)
Dixons looks to Russian Eldorado for growth (http://www.channelregister.co.uk/2005/04/15/dixons_eldorado/)