Edinburgh (Scotland): In a move that has been greeted with dismay and protest by unions, Scottish Widows, a finance company in Edinburgh has decided to sack 125 local employees and replace them with workers in India.
The announcement by the firm has been described by local unions as very "short-sighted", but a spokesman for the firm was quoted by scotsman.com as saying there would be no compulsory redundancies.
"There will be no compulsory redundancies as a result of this work, and our aim is to minimise the impact on our people. However, there will be some internal re-buttignments and moves across our client services function in support of this work. Any reduction in roles will be managed through natural turnover, the reduction in temporary employees and a decrease in overtime," a company statement said.
The cuts will affect workers in the initial processing centre, those dealing with applications and processing of life butturance products and those dealing with application and processing of pensions. The company said the job cuts would not involve customer contact work.
"We are concerned that this is another example of the 'follow my leader' approach that many financial organisations have taken," said David Fleming, the national secretary of the union Amicus.
The new centre in India is expected to be in operation by Christmas and the last of the Scottish positions will be vacated by June 2006.
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A spokesman for Amicus described the "offshoring" process - as representing a "very worrying phenomenon". "So far, there have been between 18,000 and 20,000 jobs offshored from across the UK," he said.
"In the longer term, what is happening is that we are seeing less of the wholesale job cuts from companies in this country and more of a case of natural wastage; as people leave jobs here the positions are being filled in India and elsewhere. If this keeps happening there is a risk it will affect the intellectual capacity that makes Scotland the jewel in the financial crown, and that will be lost in the next ten to 20 years," he said.
More than 20,000 call-centre jobs have travelled overseas, chiefly to India, to exploit cheaper wage costs there. But the change has been accompanied by increased complaints of difficult communications and bad advice, notably for people calling directory-inquiry services in search of a local telephone number or address.
