Lloyds TSB has been accused by its union of "outsourcing by proxy" after it announced the closure of a processing centre in Peterborough last week.
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The situation highlights the PR challenges faced by IT directors as businesses attempt to streamline their operations.
Steve Tatlow, assistant general secretary at Lloyds TSB Group Union, accused the bank of trying to conceal the fact that UK jobs - including some IT roles - were being lost to India.
"I am certain that were Lloyds not transferring more jobs to India, the Peterborough site would not close," he said.
A Lloyds TSB spokesman said, "This is not an offshore outsourcing announcement. The move is part of plans to increase automation and operational effectiveness efficiency. Offshore outsourcing is part of our strategy, but it is wrong for the union to second-guess decisions that have not yet been taken."
The bank said it would offer every employee opportunities for redeployment, but it warned UK workers that 400 jobs would go by the end of the year.
The affected jobs include some IT posts, plus administration and account handling roles. The bank said the functions were moving to other UK IT operational centres of excellence as part of an ongoing review to streamline operations.
The bank employs about 2,500 staff in India and has signed several outsourcing agreements in the past 12 months, mostly recently signing a back-office processing deal with Xansa last November.
Phil Codling, principal analyst at research firm Ovum, said the job losses at Lloyds TSB were part of a trend among large businesses to develop a cheaper global workforce. "Everyone is looking for the best service at the best price," he said.
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