IT jobs in firing line whoever wins ABN battle

RBS may have moved to outflank Barclays over ABN, but whoever wins, jobs - specifically IT jobs - look like they will be on the line.

Assuming the Barclays/ABN merger goes ahead - and it is now a very big assumption - IT jobs certainly appear to be among the most vulnerable, says Ian Gordon, banking analyst at Dresdner Kleinwort.

"The Barclays merger document identifies some significant IT synergies. We should see a reduction in overall IT spending and an acceleration of offshoring," he predicts.

By combining, the banks hope to slash their annual costs by an estimated US$3.81bn, or 10%, by 2010.

More than half of this, it is anticipated, will come from combining service operations and moving some 10,800 jobs, mostly back-office functions, to India and other low-cost countries.

A further 12,800 jobs would be cut over the next three years from the combined workforce of 217,000 through redundancies and attrition. In the UK, Barclays employs some 62,400 people.

Nearly a third of the cost savings will come from consolidation in other IT-related areas such as data centres, support networks, development, and software and hardware.

The idea, too, would be for the merged group to use ABN AMRO's trade and payments back-office system. It doesn't look great, whichever angle you come at it from.