AMP hits outsourcing trail

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After taking the axe to its IT staff numbers, financial heavyweight AMP will be hitting the outsourcing trail in a big way, with CEO Andrew Mohl mooting a move to a “best of class” organisation for it financial services and banking arms.

A spokesperson for AMP confirmed that “around 220” positions will be cut from IT, including 90 contract positions. Most of the IT cuts will be made in the Australian Financial Services unit, where an overall total number of 550 positions have been earmarked to go.

“We are lowering our IT spend and we are targeting the cost saves in all of our support functions,” Mohl said in a conference call with analysts.

“By effectively going to a best of class provider of servicing and technology, we will have significantly improved cost efficiency and we will have scalability, so we will be able to grow relatively quickly,” he said.

The cuts come as part of a company-wide initiative to cut 1200 positions, which AMP says will save it $100 million. Around 60 IT jobs will reportedly be taken out of the company's banking operations.

“We've been operating across the value chain in three countries with a fairly wide range of products using our own technology and doing our own processing in many cases,” Mohl said of the banking division.

A spokesperson for AMP declined to detail any organisations involved in outsourcing discussions, however Mohl's “best of class” description would seem to rule out all but the multinational services firms.

AMP recently renewed a five year, $550 million contract with CSC for its IT infrastructure management, but Unisys has also been touted as a possible candidate for the outsourcing.

A move to outsourcing is expected to take six to twelve months to complete, Mohl told analysts.

AMP has also lined up its Corporate Office functions for cutbacks, with the closure of the global IT unit as a stand alone entity moving corporate IT functions under the Strategy and Development umbrella, under the leadership of Marc de Cure.

The change will see the departure of 160 staff, including current CIO Warwick Foster, whose exit was announced in October.

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