IT Jobs at ABN Amro Under Pressure
Whoever wins the battle for ABN Amro, the bank's staff - especially its IT professionals - is going to feel pressure.
Ian Gordon, banking analyst at Dresdner Kleinwort, pointed out that Barclays' initial bid for ABN identified "some significant IT synergies." If a Barclays/ABN merger went through, "we should see a reduction in overall IT spending and an acceleration of offshoring," he said.
Of course, now that the Royal Bank of Scotland has weighed in with an offer of its own, it's far from clear whether Barclays will claim the ABN prize. Still, Gordon's analysis of the dynamics of a Barclays/ABN deal - and its impact on a combined workforce of 217,000 - is sobering:
First, by combining the banks could slash their annual costs by an estimated 10 percent, or $3.81 billion, by 2010. More than have of these savings could come from combining service operations and moving some 10,800 jobs, mostly back office functions, to India and other low-cost countries.
Another 12,800 jobs would be cut over three years through redundancies and attrition.
Nearly a third of the cost savings would come from consolidation in IT-related areas such as data centers, support networks, development and hardware/software functions.
Finally, the merged companies would use ABN Amro's trade and payments back-office system.