Npower in controversial BPO with Capita and TCS

‘Big six’ UK energy supplier RWE npower is in now in final negotiations to outsource its customer management to Capita and back office administration services to TCS. Yesterday, npower broke the news that it is to cut 1,460 UK jobs, and provided more detail on the plans this morning (see here).

540 UK call centre jobs are now to be outsourced to Capita, as npower's preferred supplier to take on 'much of npower’s customer facing work' as well as providing business transformation for its domestic customer services business. Final negotiations are now taking place on the proposed £120m 7-year deal, to start on 1 February, 2014.

Meanwhile the 1,460 redundancies will be in roles that will be taken on by TCS, including back office administrative activity such as checking meter readings against customers’ bills. Npower is now going into a 60-day consultation period with the affected employees.

Capita is no stranger to controversial deals (see Capita signs £1.2bn O2 megadeal). Here at least Capita appears to be TUPE'ing across all affected customer service personnel.

For TCS, this is far more controversial since its contract is being directly related to the 1,460 back office job cuts. Npower said 'back office administrative activity...would be outsourced to India using TCS. Over the next 8 months, around 1460 posts would be made redundant as a result'. This has implications for TCS' strategic approach to date in the UK as an investor in 'UK plc'.