Barclays bank is closing a technology hub in the US and laying off 270 people as it weighs up its global delivery options.
The centre in McKinney Texas – which is part of Barclays investment banking arm – was set up in 2014. At the time Barclays promised to invest $4m if the local development organisation could recruit 500 people by 2017 and retain them until at least 2022.
But Barclays has not taken this option and the site will close in September 2016, the roles moving to other locations.
When the centre was announced, the McKinney Economic Development Corp said Barclays was attracted by a highly educated and abundant labour pool.
Barclays was not available for comment.
Peter Schumacher, director at business consultancy The Value Leadership Group, said closing the centre in McKinney needs to be seen in the context of the restructuring underway at Barclays. "Under the leadership of John McFarlane, the bank is pursuing an ambitious schedule to generate greater value. Key initiatives involve simplifying the business and reducing costs."
"The IT center in McKinney is relatively small and has comparatively higher operational costs compared to captive centers in India. While closing the center in McKinney is a disappointment for the local community, maintaining it doesn’t fit with Barclays's priorities for the future," added Schumacher.
Large businesses such as Barclays have options all over the world for their technology centres.
The latest Global Service Location Index from management consultancy AT Kearney ranks India as the top location with a good balance of cost, skills and business environment.
China took second spot followed by Malaysia. Fellow Asian countries Indonesia, Thailand and the Philippines were also in the top 10 – at five, six and seven respectively. These three countries are part of the Association of South-East Asian Nations (Asean) block, as is Malaysia, giving the regional group four of the top 10 global service locations.
Brazil broke up the two Asian groups at number four, while Mexico and Chile were eight and nine, respectively. The other country to make it into the top 10 is Poland, at number 10.
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Large companies might have a different mix of delivery locations for businesses units in different geographies. For example, the Asia-Pacific (Apac) arm of a global business might choose a combination of India, the Philippines and China, while the North American arm might use Brazil, Costa Rica and Mexico.