Barclays Capital is forcing its IT contractors to choose between a 10 per cent pay cut or a quick exit from the company.
The decision, presumably an alternative to cutting jobs as the bank negotiates the current financial crisis, has sparked outrage amongst contract staff, who have to signal their "acceptance" of the wage cut this month.
The forced pay cuts will then come into force from next month and staff can either accept them or work out their notice. Anonymous Barclays contractors told us they would take the cut but had already starting looking for new jobs.
Agencies we spoke to, which all requested anonymity, said they were not surprised at the move and that other city banks were cutting rates and the number of contractors employed.
But Barclays Capital seems to making larger cuts than other institutions and several recruitment specialists criticised the way the bank has forced the changes down contractors' throats.
One said: "This is exactly the worst thing to do. Sack a whole person, and choose that person, rather than annoy everyone and risk losing someone from a profitable part of the business." Nevertheless, other banks are expected to follow BarCap's lead.
Dominic Connor, director at P&D Quantitative Recruitment, said: "This is the sort of sloppy management that got BarCap into this mess in the first place. The sums involved are small but the inevitable but random loss of contract staff is just to make some beancounter look good on a report. Ten per cent across the board is simple minded and bluntly inefficient way to cut costs."
Barclays Capital declined to comment on this story.
Citigroup is today expected to announce sizeable job losses. At an analysts meeting the company pledged a 20 per cent cut in its $60bn annual budget. The bank is resisting calls for it to be split up. according to the FT but will sell off non-core business, cut jobs and radically reorganise its IT system.
Credit checking agency Experian released research yesterday predicting the loss of 10, 000 City jobs over the next three years. Experian reckons 40, 000 UK jobs in banking, finance and insurance will disappear between 2008 and 2011.®