Never knowingly under-digitally transformed: Retailer John Lewis outsources tech function to Wipro
- Reference: 1593619708
- News link: https://www.theregister.co.uk/2020/07/01/the_john_lewis_partnership_wields/
- Source link:
CIO Mike Sackman said: "Today is an important milestone in the evolution of our Technology and Change team," and reckoned Wipro will ensure the group always has "access to up-to-date technologies and specialist expertise."
In what will be scant comfort to those shunted to the new employer, Sackman also insisted they "will remain fundamental to the success of our Technology and Change activity and to the future success of our business."
Given the state of the [2]COVID-19-ravaged British economy , which went into [3]free fall during lockdown , the timing of the move would appear short-termist as techies are the ones that could help John Lewis Partnership build a future as a digital business.
The Partnership previously announced profits (before tax) of £146.4m on revenues of £10.2bn in its [4]2020 annual report [PDF].
The outsourcing news was trotted out the day after [5]chairwoman Sharon White wrote a memo to employees – seen by us – that warned "it is highly unlikely that we will reopen all our John Lewis stores" and "it is likely that there will be implications for some Partners' jobs."
She noted in the memo that John Lewis's sales had shifted to 100 per cent online at the height of the pandemic from 40 per cent prior to the crisis, while online sales for the partnership's grocery arm, Waitrose, had climbed from 6 to 13 per cent (and would have been higher had there been the capacity).
"Some surveys suggest that the public are nervous about venturing out," White added. "In other countries, people have returned to normal shopping habits soon after lockdown. We will have a better idea over the next few months how things will pan out in the UK, but a reasonable assumption is that John Lewis online could account for as much as 60 per cent to 70 per cent of total sales this year and next."
White, who was previously CEO at comms regulator Ofcom, said the business needs to "seize the moment" to "resize the Partnership, reflecting customers' further shifts online". She was also keen to promote updates incoming to both the John Lewis and Waitrose online stores.
The grandstanding makes the nudging to Wipro of so many in-house IT staff, experienced in the company's systems, all the more inexplicable.
The retailer's techies are somewhat unimpressed by the move as they will be expected to do the same job from the same location (i.e. the computer hall) but, said sources, with fewer benefits.
Those benefits include an annual bonus, six months of paid leave after 25 years of employment and discounts. The store discounts extend into retirement for those who have put in a quarter of a century of service unless, alas, they have been TUPE'd (Transfer of Undertakings Protection of Employment) into Bangalore-based Wipro.
Earlier this year, White launched a [6]"strategic review" – expected to be completed in autumn – into the business, stating in a March earnings call it planned to close three Waitrose stores and look into the suitability of the "Never knowingly undersold" price-matching pledge.
The Register has asked John Lewis to respond to a series of questions we sent but have yet to hear from the retailer.
[7]2019 phishing victim Wipro [8]recently named former Capgemini COO Thierry Delaporte as its new CEO after [9]reporting revenues of $8.1bn . ®
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[1] https://www.johnlewispartnership.co.uk/media/press/y2020/jlp-announces-partnership-with-wipro.html
[2] https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpfirstquarterlyestimateuk/januarytomarch2020
[3] https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/april2020
[4] https://www.johnlewispartnership.co.uk/content/dam/cws/pdfs/Juniper/ARA2020/JLP-2020-Annual-Report-and-Accounts.pdf
[5] https://www.johnlewispartnership.co.uk/media/press/y2019/john-lewis-partnership-appoints-sharon-white-as-chairman.html
[6] https://www.bloomberg.com/news/articles/2020-03-05/john-lewis-to-pay-2-employee-bonus-despite-u-k-retail-gloom
[7] https://www.theregister.com/2019/04/16/wipro_confirms_flushing_phishers_from_systems/
[8] https://www.theregister.com/2020/05/29/new_wipro_ceo_thierry_delaporte/
[9] https://www.theregister.com/2020/04/16/wipro_q4_19_20/
[10] https://whitepapers.theregister.com/
Re: That will be 244 people looking for a job very soon
I do hope someone sensible in JL stops this.
JL has long been a trusted brand in the UK, with a dedicated, hard working and deeply knowledgeable workforce. It is technical people, with a deep and robust understanding of the business that will help it compete at the top table, that will unearth opportunity from the value locked deep inside the business and ultimately propel it forwards in the rush to digital.
It is a sign of significant naivety that this is being handed over to a third party.
Good luck John Lewis, I wish you well but fear you're f**ked.
Re: That will be 244 people looking for a job very soon
"I do hope someone sensible in JL stops this."
that ship sailed long ago.......
they wanted to announce this earlier but CV19 tripped up their plans.
This is the action of an organisation desperate to reduce costs at any cost.
the previous management stitched us all up by appointing someone with no retail experience then the senior execs all bailed with golden parachutes as soon as the new unexperienced exec started, SW has no chance in this amazingly difficult climate, the previous mob should have their golden goodbyes taken away!!!!
Madness
If you are a small company with a few IT people, it may make sense to get economies of scale by outsourcing, but I struggle to understand why large businesses with hundreds of IT staff would outsource.
It is such a short term view - haven't they seen all the other companies that continual go through the outsoucing / insourcing cycle, plus all the failed IT projects being run by external consultancies. Not to mention the fact that from now on, IT in retail is a core function - the biggest retailer in the world is an IT company - Amazon.
Sinking Ship ahoy
sad to see so many experienced staff tossed by the wayside.
the worst bit is they are not offering redundancy, just TUPE.
won't be long before WiPro will piss everyone off to the extent that people leave without a payout after originally joining what many thought and hoped was a safe place of employment with the caveat of having a say on your future as John Lewis constantly make a lot of noise about "the Partnership" "Democracy" and that it some how stands them apart from other businesses. Doesn't look that way now.
It's certainly personal now to many.
change often needs to happen but outsourcing isn't the only way to bring about change. Outsourcing does point to stress in the business as they desperately look to slash costs knowing it'll cost more in the long run.
Won't be shopping in John Lewis any more...
Outsourcing IT never ever works.
That will be 244 people looking for a job very soon
or as soon as Wipro can offshore them to India (or somewhere even cheaper)
The last time it happened to me, I said NO when asked to train my replacement. I left them to it and retired.
There is no future in IT in the UK.