Scottish jobs hammer blow as nearly 600 posts at risk at bakery company Aulds and call centre firm Capita

The workers who are employed by outsourcing company Capita may be offered transfers to other John Lewis contact centres as far away as Plymouth, 500 miles away from Glasgow.

John Lewis gave the staff six months notice yesterday morning while announcing that they were ending its contract with Capita, which employs more than 4,000 people in Scotland.

It came as 26 stores belonging to Greenock-based bakery firm Aulds were at risk with 180 jobs under threat after its retail arm was placed into liquidation having suffered losses of more than £400,000.

The business, which has been providing freshly baked products to Scots ever since its founder opened his first store nearly 120 years ago, said competition from big supermarkets combined with increased costs of ingredients and distribution meant the business could not survive.

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The move does not affect Aulds' bakery products which can still be bought from branches of Scotmid and other local convenience stores.

Managing director Alan Marr, a fourth-generation descendent of founder Thomas Auld, who opened his first bakery store in 1900, said: "We sincerely regret that a significant number of our colleagues will be affected by these circumstances, and we'll be working closely with local job centres and other services to help people into new jobs if necessary."

John Lewis said the move to a decision to end the Capita contract in January comes as it wants to handle more of its customer service functions internally - but others see it as a cost-cutting move.

It comes just a month after John Lewis Partnership, which owns John Lewis department stores and the Waitrose supermarket chain, warned that profits in the first half of 2018 will be "close to zero".

Last year the John Lewis group made £26.6m in the first half of the year, and blamed heavy investment for this year's expected fall.

John Lewis said they were unable to estimate how many Capita staff could be accommodated for redeployment to John Lewis's other centres in Plymouth, Manchester and Hamilton "until all individual consultations are complete".

• READ MORE: Staff bonuses fall at John Lewis

The Plymouth centre is operated by French outsourcing giant Sitel UK.

One staff member said that only a small number could be accommodated in Hamilton and that there was therefore "very little opportunity for redeployment".

A John Lewis spokesman said: "We have announced that in January 2019 John Lewis will end its contract with Capita, bringing more customer service functions in-house as it continues to strengthen its internal customer service operations.

Investments made over the recent years have enabled us to enhance the capacity of our in-house contact centres, allowing us to further enhance the support and service we offer our customers.

"The transition of work will mean that from January 2019 our in-house contact centres in Hamilton and Didsbury will operate at full capacity throughout the year. As well as our in-house team, a proportion of the work from Capita will also be transferred to Sitel [in Plymouth] who we currently work with in other areas of customer service support.

• READ MORE: Losses cut at Aulds as the baker looks to the future

"We are working closely with Capita to support members of staff affected by these changes."

A Capita spokesman added: “Capita has successfully managed the John Lewis contract since 2014 and we are proud of the outstanding service we have delivered.

"This decision reflects the changing retail market and the evolving needs of our client. We will continue to work closely with John Lewis to ensure a smooth transition of these services.”

John Lewis chose Capita to manage one of its online operations from Glasgow in a contract worth more than £90 million four years ago.

The outsourcing company, which manages the retailer’s call centre for its internet shopping services succeeded Teleperformance, the French group, in running the five-year contract.

Capita said at the time that the customer contact centre would remain in Glasgow and that 550 employees would transfer from Teleperformance.

In March John Lewis cut its annual staff bonus to the lowest level in 64 years after annual profits plunged 22 per cent to £289m.

Sir Charlie Mayfield, the chairman of JLP, blamed the downturn in profit and the staff payout – which has been cut for five years in a row – on subdued consumer demand and “significant changes to operations across the partnership, which affected many partners”.