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More IBM contractors get rates cut

Elan feels the burn

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Another group of contractors at Big Blue have had their pay rates cut, this time via recruitment outfit Elan.

The company and Elan are remaining quiet on how much the rates have been cut by, but one anonymous source told The Register that it was by as much as 15 per cent.

"This seems ridiculous to us, when the majority of contractors are working on revenue earning projects, surely this ultimately will result in lost revenue plus IBM is bucking the trend when it comes to profits," said the source. "It seems more than a little harsh mid contract."

Just last month recruitment group Hays confirmed it was slashing contract staff rates at IBM. It also declined to comment on how many would be affected, but it was understood that a limited group of up to 300 contractors were involved, and not the entirety of IBM UK's contract employees.

An Elan spokesman told El Reg today that some of its contractors had been informed of rate cuts.

"This week technical subcontractors engaged on IBM business have been notified of changes to their daily rates," he said, echoing Hays' statement in March.

He added that Elan always tried to ensure rates were “fair and appropriate within the marketplace”.

We asked the spokesman if he could confirm how many contractors had been affected by the rate cut and by how much, but he declined to comment.

A person familiar with the matter told us that rates “hadn’t been cut across the board” but rather had been “limited in scope and specific” to some IBM contractors. ®

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