BA lays off contractors
Artical from CW360....
Thursday 12 July 2001
British Airways' decision to lay off 100 contractors is fresh evidence that companies are reacting to the economic slow-down by cutting IT costs. The airline will reduce the number of contractors it uses over the next three months in a drive to reduce its external IT spend, it said last week. Some of the work carried out by the contractors will be taken over by workers in India. BA is also reviewing its overall IT expenditure as part of a wider cost-cutting push. Analysts predicted that although companies would follow BA's example and shed contractors the jobs of permanent IT staff should be safe. A spokeswoman for BA refused to comment on reports that it had imposed an immediate freeze on its software and hardware spend. She added that IT professionals directly employed on fixed-term contracts by BA would not be affected by the job cuts. About 2,500 staff work in BA's information management department. Anthony Miller, an analyst at Ovum Holway, said BA's decision to lay off contractors was no surprise. Companies always lay off agency staff first during an economic downturn, he said. Demand for contractors has also been reduced as many companies have cancelled or delayed e-commerce projects amid the economic gloom. But companies would want to retain their permanent IT staff to run and maintain their main IT systems, Miller added. "[Non-IT companies] don't want to let their IT staff go who are working on their core IT systems," Miller said. "IT departments have been running pretty lean anyway," he added.