Abbey moves 400 call centre jobs to India

Abbey National, Britain's second biggest mortgage lender, today said it was moving 400 jobs to India as part of an overhaul that would also close its Edinburgh life insurance office.

The closure of the Edinburgh office will mean the transfer of 900 jobs at Scottish Provident to the company's Glasgow office. Staff at Provident, which was bought by Abbey in 2001 for ?1.8bn, are to be offered terms to encourage them to relocate or commute to Glasgow.

Abbey is also to close its offices in Warrington and Derby, while changes in Bradford following the opening of a call centre in India, will mean the loss of around 400 jobs.

"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," Luqman Arnold, the chief executive, said in a statement.

Abbey is undergoing a major shake-up under Mr Arnold, who was brought in after the company's ill-judged foray into wholesale banking that led to a loss of ?984m. Mr Arnold wants Abbey to return to its core business of retail banking.

The company said earlier this week it had sold most of its private equity investments and was reviewing the future of its fund arm, Abbey National Asset Managers, which oversees more than ?29bn of assets and employs about 170 people. Abbey employs around 23,000 people in the UK.

Scottish Provident is one of the UK's leading insurance providers, offering life, critical illness, income protection and mortgage protection insurance. The Edinburgh-based company, founded in 1837, joined the Abbey group as part of a takeover in 2001 after its members voted to de-mutualise and transfer Scottish Provident's business to the group.

Around 730 customer service workers are employed in Provident's Edinburgh office, with Abbey National Asset Management in Glasgow - which manages largely closed life funds for Scottish Provident - employing 110 staff and managing ?29bn of assets.

Unions accused Abbey of imposing redundancies through the back door by asking 900 people and their families to uproot from Edinburgh to Glasgow or commute 50 miles every day.

"Every effort will be made to redeploy people affected before redundancies are made," Abbey said.

The latest changes are part of a wide-ranging review of Abbey's operations which began in February 2003. The review's main aim was described in today's statement as "improving customer service and efficiency of operations by concentrating investment in people and technology in larger centres".

That will mean concentrating on five key locations - Belfast, Bradford, Glasgow, Milton Keynes and Sheffield - where ?25m will be invested in IT, training and the working environment over the next three years. Abbey's head office in London and its network of branches are unaffected.

"This is not just about cutting costs - it is about delivering excellent customer service and giving our people better tools to do their jobs, better training, better working environments and better career opportunities in our larger centres," Mr Arnold said.

Since the review began, Abbey has announced the closure of seven smaller sites.