JPMorgan has written to IT contractors demanding they take a 15% pay cut by the end of the month or face termination.
JPMorgan joins a roll call of top City banks who have moved in recent months to slash IT contractor salaries. In August, Barclays instituted a ten per cent cut in IT contractor rates. It has been followed by similar cutbacks at Deutsche Bank, Merrill Lynch, Nomura and Royal Bank of Scotland.
In its letter to contractors, JPMorgan attributes the cuts to "prevailing market conditions" and warns: "In the event of a proposed refusal to agree to the reduction in charge rates either as a whole or for individual contractors, we will consider giving termination notice under the terms of the existing contractor's task order, at our discretion."
A September poll of 4500 IT contractors has found the median hourly rate for IT contractors in the financial services sector has slipped by 12% to £44 from £50, according to the Association of Technology Staffing Companies (ATSCo) and CV specialist iProfile.org.