Insurance giant Norwich Union has announced it will increase its offshore headcount by culling up to 1,000 UK-based jobs, transferring them to India.
Another 500 positions at the insurer, which is part of the Aviva group, have been earmarked for relocation to third-party IT suppliers by the end of next year.
The moves are part of a cost-cutting regime that will see the company shed 4,000 employees in total to achieve 250 million in annual cost savings from 2008.
"The integration and efficiency measures we are announcing today are part of a programme which will result in an increase in customer focus across our UK businesses along with better and more efficient use of technology," said Patrick Snowball, Norwich Union's executive chairman.
"We have to ensure that Norwich Union remains a highly efficient and effective company in what is an increasingly competitive and dynamic environment. Customers' buying habits are changing rapidly as technology becomes more accessible. Already half our new direct motor insurance policies are purchased over the internet. Consumers, IFAs and brokers are increasingly operating in a self-service world."
In response to the insurer's announcement, private sector union Amicus demanded that a debate be opened up between employers and the government to look into the increasing fondness of offshoring and its detrimental effect on UK workers.
"We will take a zero tolerance approach to any company that makes compulsory redundancies as a result of offshoring," said Amicus' national officer, David Fleming.
"The brutal treatment of Aviva's staff is a reminder of the human consequences that offshoring has on local communities and the economy. Ministers and MPs have turned a blind eye to the long term effects offshoring is having on the economy but as unemployment creeps up in their constituencies they will have to take notice."
But the company claims it will try to minimise the level of compulsory redundancies, adding that the exercise will help it meet it financial targets and benefit shareholders.
"The loss of jobs is never welcome, particularly as the news has come only one month after the company announced an increase in profits of more than a quarter for the first half of the year, to 1.6bn," said the National Outsourcing Association (NAO)in a statement.
