news Top-tier Australian bank Westpac today confirmed 188 local jobs would be affected by a shift in its technology sourcing strategy which is slated to see some internal work handed off to external suppliers.

Last week the bank’s chief executive Gail Kelly revealed it was in the advanced stages of working through a change to its sourcing strategy for application development services. Although at the time Kelly acknowledged some jobs would be affected, the executive didn’t go into detail as to precisely what the bank’s new strategy would entail. Yesterday some of those details started to become clear, with the Financial Services Union, which counts some Westpac staff amongst its members, issuing a statement claiming the cuts were slated to affect 188 staff.

“Earlier this week Westpac announced to staff that we were changing the way we outsourced some roles for Enterprise Testing Services in one part of our technology business,” confirmed a statement by Westpac this afternoon. “As part of the initial consultation process, we outlined that there will be around 188 roles in scope as part of the new sourcing arrangements we are transitioning to.”

The union claimed the job cuts were part of “an 18 month-long program” of reducing Westpac roles, and replacing those roles with outsourced and offshore providers. And, it pointed out, the cuts came in the wake of Westpac announcing a record net profit of $6.9 billion.

Furthermore, the union claimed Westpac had attempted similar outsourcing initiatives previously, but failed. “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,” the union wrote. “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.”

The bank said the future of its outsourcing initiative was not yet clear. “The final impact on our Full-time staff will not be known for a number of months as we work through the transition,” the bank said. “Where there are reductions in roles, we will use natural attrition where possible, redeploy employees to other roles, and reduce temporary/contract staff first to minimise the overall impact on our technology workforce. The majority of these in-scope roles will come from head-office in Sydney.”

opinion/analysis
I think what’s going on at Westpac at the moment is a fundamental shift in the way it sources quite a large chunk of its technology workforce, and I don’t think the bank has yet made clear precisely what’s going on here. With a view to clearing up some of the misconceptions, marketing guff and Machiavellian accusations being thrown around at the moment, I’m planning a longer article on this issue later this week. If you know more about what’s going on, please feel free to use our anonymous tips form. I have a pretty good idea at the moment, but I can always use more detail ;)

Image credit: Winam, Creative Commons

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1. Bruce
   Posted 23/11/2011 at 12:46 pm | Permalink | Reply

   The Government should protect the local jobs.It is alright to bring the skilled IT professionals to keep the jobs in Australia.It is not alright to out source our jobs away.The Westpac is givng 2 billions oz dollars to India .It is good for the india and We are loosing 188 IT professional with Uni degree and more than 10 yrs of services to the Company.The educated professionals become unemployed and go to CES.188 australian Families will be loosing the jobs and their future.We need to check our values.These are the reasons that India and China become wealthier than before.
   The Government have the responsiblity to protect our jobs ,our families and their future.