AIB scraps plans to offshore IT roles to India

Irish bank considers offshoring move with Wipro too risky in view of current backdrop

Allied Irish Bank: no longer plans to offshore roles in its IT operations unit, where 129 staff were outsourced to Wipro more than two years ago.  Photograph: Paul McErlane

Allied Irish Bank: no longer plans to offshore roles in its IT operations unit, where 129 staff were outsourced to Wipro more than two years ago. Photograph: Paul McErlane

 

AIB has changed its mind on offshoring certain IT functions to India as part of its five-year outsourcing arrangement with Wipro. It is understood that the bank decided that such a move was too risky in the current environment.

The bank confirmed to The Irish Times it no longer planned to offshore roles in its IT Operations unit, where 129 staff were outsourced to Wipro more than two years ago.

In a statement, the bank said: “On an ongoing basis we review our IT operating model to ensure we are delivering to our changing customer needs. In 2015, AIB outsourced some IT operations to multiple partners, including Wipro.

“As part of our agreement with Wipro, we recently considered offshoring a small number of IT operations roles. Following an evaluation, AIB has decided not to offshore these particular roles at this point in time.”

Informed sources suggested that some 100 roles had been earmarked by Wipro for India but the bank put the figure at about 30.

AIB is believed to have spent a large sum of money on implementing the outsourcing arrangement, with EY engaged as consultants on the project.

The outsourcing plan was originally conceived during David Duffy’s time as chief executive. Since then, AIB has returned to sustained profitability, paid a dividend to shareholders, and regained a main stock market listing in Dublin and London.

Redundancy packages

The transfer of roles to India would also have resulted in a number of long-serving staff, who moved from AIB to Wipro in 2015, being offered redundancy packages. The bank’s change of heart means those offers are now off the table.

The Financial Services Union welcomed the retention of the jobs in Ireland.

“The FSU was advised on Monday of the decision by AIB to direct Wipro to retain jobs in Ireland that had been earmarked for offshoring to India,” its general secretary Larry Broderick said. “This is welcome news and provides job security to staff in the ITO section of Wipro who carry out work for AIB.

“This development strengthens the union’s view that we need a strategic approach to banking services in Ireland that includes the issue of outsourcing and offshoring technical support and other functions. This is important for employment in the sector and also for customer confidence and security.”

In addition, Mr Broderick said AIB had advised the union that a “review of the work” that Wipro’s application, development and maintenance section undertakes for AIB was under way. “We expect clarification on this in the coming months,” he said.

It is understood that about 100 roles are involved in this area, with 28 of them already offshored.

Founded in India in 1945, Wipro is a listed company specialising in global IT, consulting and business process services. Its website says it has a “dedicated workforce” of more than 170,000 staff.