September 2 2005 Dutch financial services group ABN Amro has signed a €1.8 billion (£1.23bn) five-year outsourcing deal than will see it reduce its 5,300-strong internal IT department by two thirds.
ABN has singed joint agreements with IBM, Tata Consultancy Services, Infosys Technologies and Patni Computer Systems. Contractors also include US consultancy firm Accenture.
The company predicts that the deal will bring technology savings of at least €258 million (£177m) a year from 2007.
By far the biggest beneficiary of the deal will be IBM, which stands to receive €1.5 billion (£1.0bn). IBM is to take responsibility for maintained and upgrading ABN’s infrastructure.
The deals with Tata and Infosys are worth €200 million (£136.6m) and €100 million (£68.3m) respectively for application development.
This is part of a combined cost saving drive at ABN Amro, which has also involved job cuts in its human resources division and reorganising its property portfolio. In total, the company aims to reduce operational costs by €600 million (£410m).
ABN is to transfer 2,000 of its staff to its various partners, and will continue to employ 1,800 IT specialists. As a result of the reorganisation, ABN will shed 1,500 jobs globally.