Cold comfort for Telefonica contract staff at crisis-hit Capita
Telecoms & Financial Services, Capita February 21 2018Turbulence at Capita – which has spooked the markets and triggered fears that the outsourcing giant could be in danger of becoming the ‘next Carillion’ – has prompted CWU demands for Telefonica to make contingency plans to safeguard nearly 2,000 staff, including many of its ex-employees, who conduct vital customer-facing work for the O2 and Tesco Mobile brands.
To the union’s intense disappointment, however, its request for assurances to calm the nerves of an understandably concerned workforce in the wake of a succession of Capita profit warnings and a halving of the share price in just one day has been comprehensively knocked back by Telefonica UK CEO Mark Evans.
Responding to the CWU’s call for a guarantee that, “in the event of Capita going into liquidation, that you will take back in-house the work and employees and safeguard the jobs and pensions of those Capita employees currently undertaking Telefonica work”, Mr Evans responded with little more than a statement of “Capita’s importance as a Strategic Partner to Telefonica UK.”
Thanking assistant CWU Sally Bridge for her letter “expressing the CWU’s concerns over the profit warning issued by Capita and the ensuing drop in share price”, Mr Evans continued: “Telefonica UK is one of Capita’s key clients and, as a matter of course, both companies work together to make sure that we continue to have the most satisfied customers of all UK mobile operators.
“The recent announcements do not diminish Capita’s importance as a Strategic Partner to Telefonica UK, and at this time we have no plans to make any change to our partnership.”
Mr Evans added “I am confident with Capita’s assurances that there is no foreseeable impact on delivery and that the company is taking all steps necessary to safeguard the long standing strategic partnership between our two companies,” concluding: “It would not be appropriate for me to comment or speculate on the financial status or future of a Strategic Partner.”
Sally told The Voice: “This is scant reassurance for our members, and frankly the CWU would have expected better.
“Given that the major part of Telefonica’s customer facing operation – not to mention our members’ livelihoods – would be thrown into immediate chaos if Capita was indeed to go the same way as Carillion, I’d really hope that, behind the scenes, senior Telefonica management are considering what they would do in the event of Capita’s sudden demise rather more intently than this letter implies.”
While Capita’s share price has rallied marginally since it ‘kitchen-sinked’, in City parlance, on January 31, 2.30pm today it was still only a sixth of that registered as recently as September 2016, and only just over an eighth of its all time peak in July 2015. (check closer to the time)
Pointing out that out that the current dramas at Capita have vindicated the union’s warnings in 2013 that the then biggest outsourcing of customer facing staff in UK industrial history carried significant risks of the mobile giant ‘losing control’ of work streams on which its very success depends, Sally concludes : “Just because the CWU has always sought to engage constructively with Capita since the TUPE transfer of around 2,500 CWU-represented grades out of Telefonica in 2013, that doesn’t mean to say that we feel any less strongly than we did back then that this outsourcing was ill-conceived, dangerous and should never have taken place.
“If what’s happening now isn’t a wake-up call for senior management in Telefonica I don’t know what is.
“The CWU believes it’s high time that Telefonica UK’s Board reconsiders the whole issue of whether the outsourcing of brand-critical customer facing work is actually in Telefonica’s best interests – and, more pertinently, whether it should be brought back in-house.”