Last year, a large proportion of IT contractors were faced with pay cuts but so far this year it seemed that hiring confidence had increased and pay rates were beginning to stabilise. However, just last week Virgin Media issued 400 IT contractors with a pay ultimatum – accept a pay cut of 15% or leave.
This pay cut affects any IT contractors who were previously earning £300 per day or more. It is also the second wave of pay cuts made by Virgin Media, who cut contractor pay rates by 10% last year in a ‘take it or leave it’ deal.
A spokesperson for Virgin Media commented: “We regularly review the arrangements we have with suppliers to ensure we are getting the best value from these relationships.”
When Contractor UK questioned the spokesperson regarding concerns that those contractors may now choose to look for alternative, better paying contracts elsewhere the spokesperson refused to comment.
Contractor UK asked a market analyst from the IT sector to comment on this latest news. He said that while these ultimatums were more common last year, we should expect that they could happen again, particularly in the public sector. He said: “The Conservatives today say that their government will renegotiate contracts with subcontractors, particularly IT, or get rid of them. So perhaps we better get used to it.”
Virgin Media’s last quarter results actually showed a 15% rise in profits and a 55% increase on cashflow from the previous financial year.