Barclaycard cites high Irish wage costs for its outsourcing
The directors of Barclaycard (Ireland), a company operating call centre services for the famous debit card from Ireland, outsourced parts of its operations due to cost issues here.
Fresh accounts for Barclaycard (Ireland) Limited disclose that the firm considered outsourcing activities serving western European markets "to a lower cost location" and eventually transferred a large number of staff to Hewlett Packard in Ireland.
Barclaycard (Ireland) provides call centre services and other customer services on behalf of Barclaycard International, from a property in Sandyford industrial estate.
The centre serves customers in Italy, Portugal, Greece, France, Spain and Germany. In the year under review profit dropped by €1.3m, mainly due to the global downturn.
A final dividend was paid by the company of €4.5m and the firm says it has enough resources left to repay any employment grants to the IDA.
Earlier this year Hewlett Packard took over a large amount of services and 309 staff members were transferred to Hewlett Packard. About 35 staff remain with Barclaycard (Ireland) itself.
The plan is to close Barclays in Sandyford within two years. The firm claims the arrangements were arrived at after consultations with the IDA.
"The IDA were consulted in relation to the proposal and agreed the transfer of staff from Barclaycard (Ireland) to Hewlett Packard. Due to goodwill write-downs the company will take a hit of €1.6m to the profit-and-loss account," it said.
Once the Sandyford site is closed down the company intends to pay severance costs and related costs to the remaining staff.
Ireland's labour costs remain high compared to many of its European competitors, but wages have dropped sharply in the last two years, restoring some level of competitiveness.
Barclaycard is one of the most popular debit cards in the UK.