More than 3,000 jobs of workers with a controversial Government computer contractor are to be axed over the next two years.

The job losses at Texan-based computing firm Electronic Data Systems (EDS), described by union officials as a “huge blow” to workers, follows last month’s $13.9 billion takeover of EDS by Hewlett Packard, the world’s largest personal computer maker.

The Public and Commercial Services union said it had been told that 3,378 posts would be cut - roughly one in five of the UK workforce. It condemned the job losses, which it warned would affect public services, and said it would “vigorously oppose” any compulsory redundancies.

EDS has an ongoing $4 billion contract with the Ministry of Defence, and major contracts with the Department for Work and Pensions and other Whitehall departments.

Its UK government work has often been controversial. In 2001 EDS failed to deliver a £300 million PFI project for a payroll system for the MoD, and in 2003 it lost a £3 billion contract with Inland Revenue after serious delays in the payment of tax credits that led to EDS paying the Government £71 million in compensation.

It was heavily criticised by the National Audit Office in 2004 for its work on the Child Support Agency's computer system, which ran seriously over budget. The system was rolled out two years late and was blamed for the CSA having to write off £1 billion in claims, and failing to collect £750 million in child support payments from absent parents.

Hewlett Packard warned following the takeover that it would cut 24,000 of EDS's 137,000 jobs in 65 countries the world. Today it gave more details of where the axe will fall.

“Our worst fears have been confirmed. We feared 3,000 job losses for the UK, and the figure is even higher," said Jim Hanson, national officer of PCS.

“For the last 18 months we have already seen job cuts in EDS with a voluntary redundancy exercise already in progress. It is disappointing that these figures have been made public before we have discussed how they have been arrived at.”

Mark Serwotka, PCS general secretary, said: “This announcement creates further uncertainty with little or no detail of where the axe will fall and comes as a huge blow to the workforce in the time of economic turmoil.

“Our concerns about government IT contracts in the MoD and DWP will not be alleviated by this announcement. It’s not just jobs that are at risk, but the delivery of public services that rely on IT services provided by the former EDS.

“We will be pressing management for more detail and assurances on compulsory redundancies and service levels in this period of massive economic uncertainty.”

Hewlett Packard confirmed that up to 3,378 jobs will be lost in the UK, adding: “Where possible, we will redeploy impacted individuals.”

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