Resolution, the FTSE 100 financial services group, became the latest company to unveil plans to move hundreds of call-centre and IT jobs to India yesterday, following in the footsteps of rivals such as Aviva, which already employs thousands in Asia.
Paul Thompson, Resolution's chief executive, said that although the company had so far managed to avoid any compulsory redundancies, due to the business's rapid expansion, he could not rule out compulsory job cuts in the future. The company employs 3,500 in the UK.
"We've managed to actively avoid compulsory redundancies [to date] through further acquisitions," he said. "We're actually a net hirer of people in Glasgow at the moment, but we'll have to see where we get to with the offshoring. It's not going to be something that happens overnight, and this industry has relatively high turnover rates of up to 15 per cent per annum."
Mr Thompson said the group currently employs only a handful of people overseas, but would be looking to increase this substantially over the next couple of years.
The news comes days after Norwich Union announced a further 4,000 UK job cuts, of which 1,500 are as a result of plans to move jobs to Asia. Amicus, the union, said it was angry to hear of yet more British jobs being lost at the hands of offshoring. "If this is true, this is a further blow for the UK finance sector, coming hot on the heels of the Norwich Union announcement," Dave Fleming, Amicus's national officer for finance, said.
"It is yet more evidence that offshoring is again in a heightened phase, despite the fact the business benefits and cost savings companies anticipate are not proven, with a number of companies bringing their offshored functions back to the UK. Customer response is also increasingly negative, borne out by research and reports that companies are receiving. Amicus will not accept any compulsory job cuts in the UK."
Resolution also published better-than-expected first-half results yesterday, unveiling a 35 per cent rise in operating profits, and a subsequent 15 per cent increase in its interim dividend.
Since the end of the first half, the company has completed its acquisition of Abbey's £26bn closed life funds.
Clive Cowdery, the group's chairman, said Resolution was still in the market to make further acquisitions, adding he believed future market transactions were likely to be of a similar size to the Abbey deal. Although the group now has no surplus capital, Mr Thompson said he was confident it could raise sufficient funds through the debt and equity markets if an appropriate opportunity arose.
Mr Cowdery said that several of the larger life insurers, which are still open to new business, were looking at the possibility of selling on their closed operations. However, he said that the company was equally interested in acquiring companies' open businesses.Reuse content