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IBM joins rivals in cutting contractor rates

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IBM UK is cutting some contractor rates.

IBM UK uses Hays, a specialist recruitment group, as a source for contract staff. According to Claire Fowler at Hays, "This week technical subcontractors engaged on IBM business have been notified of changes to their daily rates."

She added that Hays always tries to ensure rates are fair and appropriate within the marketplace.

It is understood from another source that a limited group of up to 300 contractors are involved, not the entirety of IBM UK's contract employees. Neither IBM nor Hays was willing to reveal the total number of contractors working for IBM UK.

A June 2003 source mentions 20,000 permanent employees at IBM UK with 5,000 contract staff, and it seems a fair bet that numbers will have increased since then.

A person familiar with the IBM UK contracting arrangements said: "IBM (is) to request that all contractors in the UK take a ten per cent cut in their rate or risk termination. This has succeeded in annoying the heck out of everyone. Most expected it, but given the record profits last year and the forecast, it has been seen as a slap in the face by some."

We understand that this rate cut may have come from IBM US and some people think that it has relevance to the potential purchase of Sun, but it may just be opportunistic given that BT and Cap Gemini are are doing the same. ®

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