Norwich Union sheds UK IT jobs in offshore move

Range of technology functions outsourced to India

UK insurance giant Norwich Union is to shed 500 UK IT jobs and outsource most of them to India, according to the firm’s chief information officer (CIO).

Alex Robinson says at least 75 per cent of the positions will be outsourced to third-party suppliers Tata Consultancy Services (TCS) and Wipro.

A range of IT activities, from application development to support and systems management functions, will be outsourced.

‘Our plan is to end up with something like a 40 per cent outsourced/60 per cent in-house split,’ said Robinson.

‘We think that will give us the best balance of cost advantage through outsourcing while at the same time retaining knowledge and core skills.’

Norwich Union has 2,800 IT staff and 1,400 outsourced roles. The firm started its IT outsourcing strategy in 2004, but last week’s announcement is by far the most significant.

‘Over the past two years we have been gradually increasing the number of roles we outsource to our global partners, and it is a continuous trend,’ said Robinson.

But he says the firm has no further outsourcing plans beyond the present deal, which will include 500 permanent staff and 200 contractors.

‘Roles requiring a physical presence in the UK, including desk-side engineers, analysis and design roles and some IT account management roles, will stay in-house,’ said Robinson.

‘We will use outsourced positions as a flexible skill base for special projects.’

The announcement is part of wider job losses affecting 4,000 of the Norwich Union’s 36,000 permanent roles across the UK by the end of 2007.

Phil Codling, senior analyst at Ovum, says there is still growth in the offshore global delivery market across the IT industry.

‘We haven’t reached the end of this trend,’ he said.

‘There will be many more announcements like this one.’