According to the FSU most of the job cuts will take place in Sydney and Adelaide with functions outsourced or offshored. The bank already has skills sourcing arrangements in place with IBM, Infosys, Tata and Wipro.
In a statement the FSU claimed that its members had warned of a reduction in the quality of IT services that would arise as a result of the accelerated outsourcing and offshoring.
The union also noted that; 'What makes this announcement more surprising is that Westpac itself has recognised that past outsourcing and offshoring of jobs has failed, as evidenced by 600 jobs previously outsourced to HP in Adelaide being returned to Westpac. Short term cost savings don't add up in the long run, and Westpac should recognise that this is also the case with this latest decision to outsource and offshore IT jobs.'
Westpac had been running a team of around 1200 IT personnel - about 400 of whom were offshore. The bank had previously retained its applications development team under the management of Clive Whincup, although how much of that will remain intact as a result of the latest cuts is not known.
Mr McKinnon said last year that the bank had been forced to rely on the offshore skills as it was not possible to find the right mix and quantity of IT skills locally that the bank needed. Now it seems it has too many for its budget.
In a wide ranging interview published in the Australian Financial Review yesterday Mr McKinnon made no mention of the looming job cuts, but did signal that the bank planned to achieve its IT transformation project for a fraction of the cost paid by some of the other big banks. He also said that the upgrade of its Hogan core banking platform to CSC's Celeriti system would complete in 2013-14.
Clearly irritated by the perception that Commonealth Bank was ahead of the pack in its transformation (Mr McKinnon was formerly CBA's CIO himself) Mr McKinnon was quoted forecasting that the bank would leapfrog CBA 'and everybody' when it came to online applications in the coming year.