Wow - Barclays and ABN Amro merger to bring 10,800 jobs to India

London-based bank Barclays PLC will move 10,800 jobs to India following a giant merger announced on Monday with ABN Amro bank as part of an effort to generate billions of euros in annual savings.

The bank announced on Monday that it planned to buy Amsterdam-based ABN Amro for about $91 billion, creating a European banking giant with more than 47 million customers, including 1.4 million businesses.

The banks hope to boost their profits by slashing annual costs by an estimated $3.81 billion, or 10%, by 2010, mostly through job reductions, outsourcing and IT savings, they said.

More than half the savings, or 57%, will come from combining some of the banks' service operations and moving them to India and other low-cost locations, Barclays said.

That will mean a net reduction of 12,800 jobs, with 10,800 positions moved elsewhere, from a combined workforce of 217,000. The cuts will be made over three years through redundancies and attrition, Barclays said. It acknowledged the "difficult consequences" for affected workers and said it will need to negotiate the layoffs with local unions and regulators.

Savings from telecommunications companies and IT will amount to about 29% of the total, or $1.1 billion, including hardware, software and development, the banks said. They plan to consolidate their data centers and IT support networks and use ABN Amro's trade and payments back-office system.

Both companies use financial software from SAP AG, according to SAP's Web site, which could make the integration process less complicated. So good days for SAP as well..

It's the latest of several outsourcing projects by European banks. ABN Amro had already announced in 2005 that it would cut 1,500 jobs and outsource its IT operations through deals worth $2.2 billion over five years. Most of the business went to IBM, with smaller deals for Infosys Technologies Ltd., Tata Consultancy Services Ltd.,Patni Computer Systems Ltd. and Accenture Ltd.

As part of this latest deal, ABN Amro will sell its Chicago-based LaSalle Bank Corp. to Bank of America Corp. for $21 billion, the companies said. The combined company will be called Barclays and have headquarters in Amsterdam. The deal must be approved by ABN Amro shareholders and is expected to close in the fourth quarter, the companies said.