Huge O2 outsourcing deal rolls out after Capita ends union beef

Ten-year, £1.2bn contract goes live following 1,000 voluntary redundancies and guarantees on pay and job security

Capita's 10-year, £1.2bn outsourcing deal with O2 has formally kicked into gear following the conclusion of a bitter wrangle with the Communication Workers Union (CWU) and the departure of 1,000 staff.

Capita announced in May that it has secured preferred bidder status for the mega deal, which covers the outsourcing of operations at four O2 contact centres in Glasgow, Leeds, Bury and Preston Brook. But shortly after the deal was announced, The Daily Telegraph reported seeing internal Capita documents outlining plans to begin a programme of location closures and job cuts from 2015.

Since then the services giant has been locking horns with CWU, with the union seeking assurances over job security and conditions. During the talks it was announced that 1,000 O2 staff would take voluntary redundancy this year rather than transfer to Capita.

Shortly afterwards CWU confirmed that it had concluded discussions and secured commitments including the local redeployment of any staff affected by potential site closures and the maintenance of pay structures and terms and conditions indefinitely.

The outsourcing project commenced on Monday, Capita announced in a cursory stock market statement.

"The deal, which builds on Capita's existing long-term partnership with O2, will see Capita run and manage O2's customer service centres and support O2 as it enhances and expands its digital service offering to customers," added the statement.