AO World's decision to shift a significant chunk of its UK call centre operations to South Africa has sparked concerns over the future of up to 200 jobs. According to the company, rising employment costs and ongoing inflationary pressures have prompted this strategic move, which is expected to yield an annual saving of approximately £4m.
AO's financial performance has been strong in recent years, with a pre-tax profit surge of 145% to £50.5m for the year ending 31 March. This growth comes on the back of a notable increase in sales, with revenue rising by 11.4% to nearly £1.3bn. The company's founder and chief executive, John Roberts, has welcomed this success but expressed concerns over the impact of government policies on business costs.
Roberts highlighted the challenge posed by new measures such as enhanced employee rights from the first day of employment, which he believes are increasing business costs and reducing flexibility. He also voiced criticism of upcoming regulations that will require employers to offer staff on zero-hours or 'short hours' contracts a minimum number of hours based on their regular working patterns.
Around 150 roles in phone sales and enquiries have already been transferred from AO's Bolton call centre to South Africa over the past 12 to 18 months, with a further 50 positions expected to follow. However, more than 100 roles dealing with complex customer queries will remain based in the UK. Overall, AO's employee numbers saw a reduction of 340 to 2,800 during the year, attributed to efficiency drives across the business.
Roberts defended the outsourcing decision, stating that it was necessary to maintain competitive prices for consumers and ensure the company's long-term sustainability. He also stressed that a fifth of AO's workforce is under 25 and confirmed that there are no current plans to reduce the company's apprenticeship programmes.
The shift in operations to South Africa comes as AO distributes £20m in special payments to its shareholders, following a period of significant financial growth. The retailer has seen a notable increase in TV sales, partly attributed to the upcoming men's football World Cup, with sales rising by 17% in May.