400 jobs under threat as John Lewis ends Capita contract in Glasgow

The workers who are employed by outsourcing company Capita may be offered transfers to other John Lewis contact centres as far away as Plymouth, 500 miles away from Glasgow.

John Lewis gave the staff six months notice yesterday morning while announcing that they were ending its contract with Capita, which employs more than 4,000 people in Scotland

It said it wanted to bring more customer service functions in-house in what is being seen as a cost-cutting move.

It comes just a month after John Lewis Partnership, which owns John Lewis department stores and the Waitrose supermarket chain, warned that profits in the first half of 2018 will be "close to zero".

Last year the John Lewis group made £26.6m in the first half of the year, and blamed heavy investment for this year's expected fall.

John Lewis said they were unable to estimate how many Capita staff could be accommodated for redeployment to John Lewis's other centres in Plymouth, Manchester and Hamilton "until all individual consultations are complete".

One staff member said that only a small number could be accommodated in Hamilton and that there was therefore "very little opportunity for redeployment".

A John Lewis spokesman said: "We have announced that in January 2019 John Lewis will end its contract with Capita, bringing more customer service functions in-house as it continues to strengthen its internal customer service operations.

Investments made over the recent years have enabled us to enhance the capacity of our in-house contact centres, allowing us to further enhance the support and service we offer our customers.

"The transition of work will mean that from January 2019 our in-house contact centres in Hamilton and Didsbury will operate at full capacity throughout the year. As well as our in-house team, a proportion of the work from Capita will also be transferred to Sitel [in Plymouth] who we currently work with in other areas of customer service support.

"We are working closely with Capita to support members of staff affected by these changes."

A Capita spokesman added: “Capita has successfully managed the John Lewis contract since 2014 and we are proud of the outstanding service we have delivered.

"This decision reflects the changing retail market and the evolving needs of our client. We will continue to work closely with John Lewis to ensure a smooth transition of these services.”

John Lewis chose Capita to manage one of its online operations from Glasgow in a contract worth more than £90 million four years ago.

The outsourcing company, which manages the retailer’s call centre for its internet shopping services succeeded Teleperformance, the French group, in running the five-year contract.

Capita said at the time that the customer contact centre would remain in Glasgow and that 550 employees would transfer from Teleperformance.

In March John Lewis cut its annual staff bonus to the lowest level in 64 years after annual profits plunged 22 per cent to £289m.

Sir Charlie Mayfield, the chairman of JLP, blamed the downturn in profit and the staff payout – which has been cut for five years in a row – on subdued consumer demand and “significant changes to operations across the partnership, which affected many partners”.

The news comes as Scottish bakery Aulds put its shops into liquidation as part of a plan to turn around the business.

The family-owned bakery’s retail business is said to be in an “unsustainable loss-making position” due to pressure from competitors and increasing ingredient, wage and distribution costs.

Aulds currently has 26 shops employing 180 staff.