BNP Paribas is threatening its entire temporary IT workforce with termination unless they agree to do the same work for less money.
The French bank told IT contractors across its UK and global operations that they could only keep their jobs if they cut their pay rates by at least four per cent a day.
Enforceable from July 2015, the ‘take it or leave’ pay cut has “practically wiped out” some IT contractor teams in Paris, said a source, where the bank is headquartered.
But speaking to Moore News yesterday from the French capital, a BNP spokesman declined to be drawn on the rate cut which, internally, the bank blames on “external market conditions”.
“Following a due diligence process”, adds a memo sent to BNP’s IT contractors, “a decision has been taken to reduce spend on contractor workers within IT.
“We would like to assure you that this initiative bears no reflection on the skills or the services that have been provided to BNP Paribas.”
The bank’s rate cut comes in the same week that it was fined almost £1m by Hong Kong’s securities regulator for failing to report so-called ‘cross trades’ over a 10-year period.
BNP was also fined in July 2014 – for a record £5.1bn – by US authorities for breaking American sanctions against trade with Sudan, Iran and Cuba.
But there is no evidence of either penalty against the bank relating to its move to cut IT contractor pay by a minimum of 4%; a figure which looks like a market alignment.
BNP is not usually afraid to slash IT contractor pay. It did so in the grip of the financial crisis in 2008, and it cut daily rates again in 2011 by a non-negotiable 15%.
BNP’s current IT contractor rate cut is also without exemptions, yet some UK-based IT contractors claim they are using it to secure flexible working arrangements.
Others are walking. “[Four per cent is] not as bad as some [rates are being reduced by here at BNP Paribas], and they gave me a month’s notice, but I don't like being bullied… [so] bye.”
Elaborating on his intention to reply 'non-acceptance' to his line manager, the IT contractor at a BNP London office said the cut equated to him working for the bank for roughly two weeks free of charge.
“[But] I expect that the majority of contractors will take it on the chin,” he said, referring to decision-day this Friday.
“Though BNP may regret terminating contracts before the summer lull when many hiring managers will be going on holiday, as those [IT contractors] more confident in their demand will just walk.”
David Ward, a director of IT jobs agency SQ Computer Personnel agrees that IT contractors voting with their feet is now a real prospect that BNP must face, even if not immediately.
He told Moore News last night: “Of those IT contractors affected by the [only] reduction [our agency has experienced in the last 12 months], about 15% chose to not accept it and took on assignments with other organisations.
“IT contractors are free to operate in an open labour market and while income isn’t the only driver, it is a significant influencer. Enforcing ‘take it or leave’ rate cuts mid-contract in most instances will cause contractors to look at the market and see what other options are available”.