Lloyds TSB,UK’s fourth-largest bank, to move roughly 1,000 jobs to Hyderabad
November 3, 2003
NEWCASTLE UPON TYNE, ENGLAND: The brutality of mass job losses has struck again in Newcastle, a city, like many in the north of England, which has barely recovered from years of industrial decline. Lloyds TSB, the United Kingdom’s fourth-largest bank, said that it would close down its call centre in Newcastle and move the roughly 1,000 jobs there to Hyderabad, India.
The announcements made by Lloyds TSB and others in recent weeks threaten to halt the progress of northern English cities such as Newcastle, Manchester and Leeds. HSBC Holdings PLC recently said it was moving 4,000 jobs out of the UK, and others such as BT Group PLC, Prudential PLC, and AXA SA have announced similar moves. Barclays PLC said it, too, was considering whether to move jobs from one of its centres in Hastings to Asia.
“It has been utterly brutal,” says Bernadette Fisher, an official at UNIFI, a labour union representing bank workers. One man said he came to Lloyds TSB after his job at another call centre moved to India. Three years later, he again faces unemployment. The US has already lost roughly 400,000 such jobs to other countries, and that number is likely to rise to about 3.3 million by 2015, according to Forrester Research.
Lee Whitehill, a spokesman for Amicus, the UK’s largest labour union, says companies have slashed as many as 10,000 call-centre jobs in the UK in the last 18 months, and he worries that the trend is accelerating. “We estimate that some 200,000 jobs will be at risk over the next five years and some people are saying that that is a conservative estimate,” Whitehill said.
It’s hard to say exactly how many people work in call centres. The Call and Contact Centres Association says the centres employ some 790,000 people in the UK—2.8% of the work force. In some areas, including the north of England, the proportion rises to almost 4%. What worries some economists is that if this trend were to accelerate, it would spell trouble not only for the call-centre industry, but for the UK economy as a whole.
Insurer Norwich Union has been increasing its work force in Delhi and Bangalore while reducing UK jobs. Spokeswoman Sue Winston said the company has been “gradually turning off a tap in the UK while we were turning on a tap in India.”
India, which has about 171,000 people working in call centres, appeals to UK companies for a number of reasons. First on the list is cost: Workers in Lloyds’ call centre in Newcastle, for example, earn on average £16,000 to £18,000 per year, which is roughly 10 times as much as their counterparts would make in India.
Raman Roy, chairman and chief executive officer of Wipro Spectramid, India’s biggest third-party call centre, said lower costs mean employers can hire more people to do more things, and the benefits are dramatic. “It can manifest itself in speed of answer,” Roy said.
“You or I may call a number (for a UK call centre) and we are told, ’Your call is very important.’ And you sit and listen to some Vivaldi music for half an hour because there aren’t enough people to answer the phone because the cost was prohibitive.”
But India’s advantages go beyond cost. “Customers come to us for price, but they stay with us for quality,” he said. “That’s because work that is done by school dropouts in the home markets, we are able to get that work done by college graduates, because they are available in India.”
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