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BT is to impose a 12.5 per cent pay cut on contractors employed by its BT Computing Partners division from the start of April.

The pay cut, which is non-negotiable, is the latest in a series of pay cuts to fall on contractors since October 2001, that have left workers with a third less take home pay.

The latest cuts follow the upcoming merger of BT Exact, its development arm, with BT Computing Partners, which carries out mainframe and midrange support for various BT businesses. The contractors' account at BT Computing Partners was recently pared from three agencies to one, Hays IT.

Contractors were told earlier this week they were to be offered new contracts - but at 12.5 per cent lower rates of pay. He estimates the cuts will hit around 85 IT contractors in BT Computing Partners.

"We get told we're doing a great job, then we get kicked in teeth," a source said. "There was no room for negotiation - it was a case of like it or lump it."

Our man, who wishes to remain anonymous, said that contractors will have little choice but to accept the cuts, because of the continued depressed state of the IT jobs market. If they leave, BT is likely to be able to easily find replacements.

The cuts leave senior programmers earning around £28 per hour and more junior staff less than £20 per hour.

It's unclear if similar pay cuts will be applied to contractors throughout the rest of the BT Group.

Although only a small number of people are affected by the cuts they are nonetheless noteworthy because BT often leads the trend in what contractors can expect to be paid by major IT employers in the UK.

A BT spokesman confirmed that a contractor pay cuts 12.5 per cent is due to be applied this April as part of a new contract between BT Computing Partners and Hays IT.

The deal is part of a managed services contract recently awarded to Hays IT as part of BT's drive to "improve the commercial terms" by which contractors are employed.

"BT has to remain competitive and can't afford to pay contractors at rates that don't reflect market conditions," he told us.

"BT tracked the upward trends in contractors pay in the 1990s, so its only natural we're tracking the downward trend now," he added. ®

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