Prudential to 'export jobs' to India

Insurance giant Prudential came under fire from union leaders today after confirming plans to trade in 850 UK jobs for a cheaper workforce in India.

The proposals add Prudential to the growing list of companies who have utilised sub-Continent call centres in an effort to claw back costs.

Around 850 life and pensions staff in Reading, Berkshire, will lose their jobs by the time the new Bombay centre becomes fully operational at the end of 2004.

Prudential, which will be left with around 1,400 workers in Reading, expects to save £16 million a year from the switch, which will see Indian graduates paid an estimated one-tenth of the salary of UK counterparts.

Amicus, which leaked details of the job losses ahead of today's formal announcement, pledged to fight the proposals.

General secretary Roger Lyons said: "This is a despicable act by Prudential. Selling 850 UK call centre jobs to India is disgraceful.

"The only reason being given is an 80% saving on wages, but no thought has been given to customer impact or the devastation this will cause to those affected."

Last November, Prudential announced 2,000 job cuts as part of an ongoing restructuring plan designed to save up to £200 million a year.

Earlier in 2001, it made 2,000 members of its door-to-door workforce redundant.

Chief executive Mark Wood said staff in India would be well-paid by local standards and trained to a high degree.

Mr Wood said the labour market was one reason for the change: "The UK market for trained, experienced financial services staff is very competitive. There's a much larger pool of graduate staff in India, and in Bombay, than in the UK."

Firms already using call centres in India include British Airways, Royal & Sun Alliance, Bupa and Churchill Insurance.

A report last year by management consultant Outsourcing Insight found the average British company could save up to 40% relocating its customer service operation to India, which has some of the world's highest quality call centres.

Salaries for graduates can start at only £2,500 - at least £10,000 less than the equivalent in Britain and firms do not have to pay national insurance or pension contributions.

With five call centres opening every month, it has been estimated that 340,000 British insurance could be transferred to the sub-Continent by 2010.

News of the job cuts was leaked prior to an official announcement but Mr Lyons said unions had no choice but to warn staff.

He added: "The Pru's reaction to our leaking of this was that we were guilty of a breach of trust, but they have breached the trust of their own workers."

The company said plans had been put in place to help those affected by today's announcement to find alternative employment both internally and externally.

Prudential has also appointed ICICI OneSource - one of the largest providers of off-shore business services in India - to set up the new centre.

Most watched News videos

{"status":"error","code":"499","payload":"Asset id not found: readcomments comments with assetId=140532, assetTypeId=1"}