IT umbrella company contractors could be amongst those who will lose their jobs after Capita announced it intends to expand offshore.
Although the decision was widely anticipated, it will not be greeted with open arms by the 400 or so workers who will see their jobs disappear to India. Capita says it has made the decision in order to reduce the cost of delivering its IT services.
Capita has not yet disclosed exactly how many UK workers will be made redundant, but unions estimate around 400 members of the 4,000 strong IT unit will disappear. The union Unite says that strike action is inevitable. Such a move could disrupt services to Royal London, Prudential and Phoenix clients.
David Fleming, the national officer of Unite, said members now had 90 days to decide what action they wanted to take.
The IT services business at Capita has been struggling to grow its share of the UK market, according to leading analyst TechMarketView. The company relies too heavily on the UK whilst market-leading providers like Accenture, Capgemini and HP have a far greater offshore presence and that makes them more competitive.
John O’Brien from TechMarketView thinks Capita will have to recruit a significant amount of people in India if it intends to increase its offshore capability. The company already has at least 550 people at its site in Poland and this is due to expand later this year. Despite this, Capita has been a latecomer to the offshore trend, but if the company wants to make it big in IT services, it no longer has any option but to follow the lead of the main players.
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