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Abbey review to cut cost base

Abbey National is conducting a no-holds barred cost review amid industry speculation that it plans to cut 3,000 jobs and outsource its admin and processing overseas.

An industry source says Abbey is going to outsource big parts of its back-office functions offshore because of the increasing cost constraints of the UK market and to take advantage of reduced labour costs overseas.

India and South Africa app-ear to be the favoured options.

Reports in the national press estimate Abbey may be cutting up to 3,000 jobs, more than 10 per cent of its current workforce of 28,000.

The company has issued a spate of profit warnings and chief executive Ian Harley has been ousted and as yet has not been replaced.

The company is also vulnerable to a takeover bid after Harley said he was open to approaches.

Abbey National spokesman Matt Young says: “We are reviewing our cost base and will make an announcement to the City when we are ready. I cannot confirm or deny job cuts or outsourcing as no decisions have yet been made.”

Riach IFA proprietor Bob Riach says: “It is odd that with the housing market booming, they should want to make cutbacks but their rates have not been competitive.”

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