Job losses not due to offshoring

9 July 2007
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10 July 2007 | Paul Snell

The extent of UK jobs moved to low-cost country locations may have been exaggerated, according to a new report.

A study published yesterday by research firm The Work Foundation found only 5.5 per cent of all jobs lost in the first quarter of 2007 across Europe were because of a switch to offshoring.

Although this was a rise on 2005's figure of 3.4 per cent, the number of staff in jobs vulnerable to offshoring, such as in call centres, have risen in the UK, not fallen.

The report also said the trend of large Western firms looking to offshoring to save money on labour costs was not clear. Instead firms are using a mix of different strategies, including nearshoring, offshoring and keeping operations at home. Cultural similarities remained a critical factor in choosing a location.

Katerina Rüdiger, author of the report Offshoring, a threat for the UK's knowledge jobs?, said: "India's high-tech sector is booming, but is not 'coming for our lunch' as some of the more apocalyptic commentators have suggested."


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