Abbey and Axa take the axe to 1,100 jobs in the UK

Abbey National, the high street lender trying to revive its fortunes, became the latest bank yesterday to transfer jobs to India. The bank said that 400 posts would be transferred to Bangalore this year.

The move will mean that Abbey's call centres in Warrington and Derby will close and headcount at its Bradford centre will be reduced.

The announcement came as the insurer Axa said it was also slashing its UK headcount by 700 positions as part of a wide-ranging restructuring. Up to 230 of those jobs may be moved to its centre in Bangalore.

Abbey started to explore outsourcing, which is becoming increasingly popular among UK banks, when it created 100 jobs in Bangalore last year to handle processing for its Scottish Provident insurance arm. The new positions will be for call centre workers dealing with current account inquiries.

The bank, which has been circumspect about its plans to embrace the controversial practice of outsourcing jobs to the East, announced the move as it also confirmed plans for a big shake-up at Scottish Provident in Edinburgh, which currently employs 900 people. It plans to close the insurer's offices in the Scottish capital this year, transferring all of the business to Glasgow.

Following a meeting with the staff yesterday, the bank said it would offer a transfer to Glasgow to all of the affected people. The bank predicts that not all of its employees will want to make the shift, and they will be made redundant. Abbey could also not guarantee any shortfall created by employees who did not want to move would be made up for by a recruitment drive.

Both moves are part of a drive by Abbey, under its chief executive, Luqman Arnold, to cut costs by reducing the number of operational sites Abbey has in the UK from its current level of 50. "We have taken some tough business decisions today that are absolutely necessary to the health of Abbey's future and for giving our customers better service at a competitive price," Mr Arnold said.

The white collar union Amicus condemned the decision; it was not consulted by the bank. "At least Axa kept us fully informed, unlike Abbey," a spokesperson said. Abbey said it does not recognise Amicus.

The bank's union said it was disappointed at the move. "There is an ongoing stampede of jobs leaving the UK like this and the UK government seem currently unable to stop it," said Linda Rolph, the general secretary of the Abbey National Group Union.

Abbey is also thought to be about to reduce costs at its fund management arm. It is believed to be about to outsource the management of its £29bn of assets to State Street. The bank will make a public comment on Abbey National Asset Management on 22 January.