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Lloyds Banking Group rolls out another 10% rate cut for contractors

Pay-cut

If you’re an IT contractor working at Lloyds Banking Group, you will be no stranger to pay cuts. Lloyds has regularly rolled out unilateral rate cuts to the thousands of contractors on its books over the past five years and is set to implement another 10% reduction in April.

Contractors at Lloyds Banking Group were informed of the rate cut last week Share on twitter, according to sources close to the situation, but will be enforcing the cut on any renewals in April to avoid a mid-contract reduction. The bank is also requiring contractors to take two weeks unpaid leave during the summer, recruitment sources claiming.

Lloyds is the latest UK bank to implement ‘put up or shut up’ contract rate cuts across the organisation. Last year, as we revealed, HSBC, Royal Bank of Scotland and Barclays all rolled out 10% rate cuts for their contractors. Barclays’ cut affected all contingency staff across the UK and US, or around 12,000 people.

In 2009, Lloyds cut contractor rates by 15% and offshored a number of tech functions to India, following the moves of most wholesale banks at that time. And again in 2012, another 10% unilateral rate cut was implemented during a period when the majority of banks were cutting pay for contractors.

This time around recruiters suggest that contractors are considering their options. There’s been a trickle of CVs out of the bank from disgruntled contractors already working on lower rates than other institutions. However, with some of the largest employers of contractors – namely, Barclays and RBS – all offering reduced rates too, opportunities for IT contractors are limited.

Lloyds didn’t immediately respond to requests for comment.

Comments (2)

Comments
  1. Lloyds Bank contractors should quit en masse. This cynical money-saving ploy won’t seem like such a good accounting decision once there are no contractors to support the IT systems on which the bank survives.

  2. Interesting that only today LBG has announced their improved full year profits of £1.8bn and the resumption of dividend payments. At a time when the same organisation is being criticised for their slow payment of suppliers too.

    Equally this is a very lazy approach as it takes no account of which suppliers are adding the most value. Surely it makes sense to look at the least value adding suppliers and move that work to the higher value adding suppliers – this would yield far greater improvements – a point I have made to other financial institutions in the past.

    I wonder how they would react if all their mortgage customers issued notice that they wanted to pay 10% less on their mortgages as a result of wanting more money to spend. Actually I don’t wonder at all, its all about who has the power rather than any notion of fairness, morality or integrity.

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