The bank said it will relocate part of its IT and administrative operations to an Indian centre which is due to begin operations by the end of 2004, employing around 250 IT and administration staff.
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The move by Goldman Sachs illustrates how offshore outsourcing to countries such as India, where labour costs are cheaper, has become a mainstream option for large companies wanting to cut IT costs.
The bank joins companies such as Aviva, Somerfield and BT, which have relocated IT operations overseas. Last week, supermarket giant Tesco announced it would develop its own IT centre in India.
However, the trend for offshore outsourcing has attracted mounting opposition from unions, who have threatened strike action if offshore deals create compulsory redundancies.
Analyst firm Ovum Holway predicts up to 25,000 UK IT job losses in the next four years through offshore deals. Most job losses to offshore outsourcing so far have been in call centres, but UK IT leaders warn that more senior staff will be at risk in the future.