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Thursday, 10 November 2011 08:56

Westpac slashes 188 IT jobs

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Less than a week after Westpac managing director Gail Kelly announced that the bank was planning to move to a 'best sourcing' model the bank has announced to the Financial Services Union that it's slashing 188 jobs as a result of a restructure of the IT department.

Last week the bank was trumpeting the productivity gains it had achieved during the year - thanks in part to a 767 headcount haircut - it has now signalled another wave of retrenchments.

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.


Speaking at the bank's results announcement last week Ms Kelly said that 'best-sourcing' technology would involve the bank 'systematically identifying and engaging the most skills and cost efficient resources' to manage its functional processes and deliver more efficiency and effectiveness.

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.


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