DHL 'offshores' UK IT work to the Czech Republic

DHL is to shut down its 500-strong UK IT support centre as part of a cost-cutting $500m centralisation project that will see the work moved to the Czech Republic.

The logistics and parcel delivery company claims the project will slash 60 per cent off its $1bn IT budget.

DHL will move to just three global IS centres and one IT infrastructure supported across the globe in Kuala Lumpur in Malaysia, Scottsdale in the US and Prague in the Czech Republic.

The three locations were chosen as part of a "follow the sun" plan to have IT support available to 120,000 users around the clock.

DHL says that it evaluated its current European operations, including the centre in Staines, and other low-cost 'nearshore' locations such as Limerick, Ljubljana and Riga, but opted instead for a new purpose-built site in Prague.

The wide availability of highly skilled, English-speaking and low-cost tech workers in the Czech Republic was one of the main factors behind the decision.

Alex Pilar, programme director of IS shared services at DHL, said Staines was a "high cost operating environment" that offered no opportunity to grow, while countries such as Slovenia and Latvia were deemed "a risky prospect" in the short term because of a still developing business infrastructure and less extensive English speaking capability.

Significant government subsidies of up to 20 per cent were also a key factor in choosing Prague, he admitted. "Cost was one of the major factors," he said.

The Staines operation will be closed down by the end of the year, but DHL said some staff will relocate to Prague.

The Prague centre, which will employ 800 people, was officially opened last month and the data centre migration is expected to be completed by December. Pilar said the transition has gone smoothly and has come in five per cent under budget.