IBM has won a seven-year $1.4 billion (£687 million) IT outsourcing contract from AstraZeneca, the drugs giant.

The outsourcing deal after AstraZeneca announced a major global cost-cutting drive in February, including 3,000 job losses, designed to cope with increased competition from generic drugmakers and patent expiries on key treatments.

Britain's second-largest pharmaceuticals company said that the 4.6 per cent reduction in its headcount of 65,000 was part of a drive to improve productivity.

The cuts will be made over the next three years and will be mainly in logistics, manufacturing and distribution.

They include the loss of around 700 jobs at an AstraZeneca manufacturing plant in Macclesfield in Northern England.

Under the deal, IBM will run servers, data storage, desktop computers and networking services for AstraZeneca around the world. The contract is an extension of a relationship the two companies have had over the previous seven years.

The deal was reached this month and will not affect IBM’s second-quarter earnings, due to be reported on Wednesday.

The contract is the latest Strategic Outsourcing win for IBM in Europe. In the second quarter of the year, the company announced services agreements with Royal and Sun Alliance for between $400 million and $500 million, and Banque Cantonale Vaudoise Bank in Switzerland for $460 million.

IBM also signed an $84 million deal with Spanish wind energy company Ibderola and a $354 million contract with Monte Paschi Bank in Italy, both announced in early July.

AstraZeneca's top treatments include the stomach acid treatment Nexium, with sales of $5.2 billion, and schizophrenia drug Seroquel, with sales of $3.4 billion.

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