Brief: 10,000 Jobs To Move Offshore Under Barclays' Merger Plan
Barclays said it would also cut outright 12,800 staff positions if its plan is approved by ABN Amro shareholders.
As part of a restructuring that would follow its proposed acquisition of Dutch banking company ABN Amro, U.K.-based Barclays would ship 10,800 jobs from the West to low-cost countries such as India.
Barclays CEO John Varley and ABN Amro chairman Rijkman Groenink, ready to cut
Photo by Jerry Lampen/Reuters
The success of Barclays' proposed $91 billion buyout of ABN Amro relies in part on annual savings of $4.75 billion by 2010. In addition to shifting thousands of jobs to lower-cost countries, Barclays would cut 12,800 staff positions. Many offshore positions would be filled at ABN Amro's ACES unit, an Indian subsidiary the bank established to provide low-cost back-office and IT services. ABN Amro already moved some work offshore through a 2005 deal that handed a chunk of IT operations, along with 3,200 tech jobs, to outsourcers. (Shareholders must approve the deal, and now a rival $98.58 billion hostile takeover bid from Royal Bank of Scotland is on the table.)
The Barclays shakeup plan comes less than two weeks after Citigroup said it would send as many as 9,500 jobs to lower-cost locales as it cuts spending by $10.4 billion over three years. The disclosures lend credence to a report this year from Deloitte predicting that offshore tech spending by banks will increase from the present 6% of the industry's $44 billion total annual IT budget to 30% by 2010.