London-based insurer Canada Life is outsourcing its technology department, cutting about 200 jobs nationally as it hands over its information systems to a third party, company officials said.
HCLTech will take over the tech department. Laid off workers, including about 35 in London, will be off the job by early July.
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“Aligned with others in our industry, this partnership will provide Canada Life with access to the latest technology, skills and knowledge that will enable the company to better meet the growing expectations of our advisors and customers,” read a statement issued by Canada Life.
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“We will treat our employees with care and respect throughout this transition.”
The move comes as the insurer is still coping with the fallout from its poor service to federal government employees that led to a public apology from Canada Life to federal government workers in December.
Canada Life landed a $514-million contract and became benefits provider to federal workers in July, but the service was plagued by slow wait times and claim refusals.
A Canada Life vice-president appeared before a House of Commons committee to issue the apology and explain how the company was improving its service.
“How this will better that service is hard to understand,” Carmi Levy, a London-based technology analyst, said of the cuts.
Canada Life officials, however, pointed to a “dashboard” where it monitors and posts how it is providing service for public service employees. That dashboard stated Friday that 99 per cent of call centre inquiries are answered within two minutes and online claims are processed in one day and paper claims in six days.
“The agreement with HCLTech will help us deliver internal IT services to our employees more effectively and efficiently, allowing our teams to continue to deliver a high standard of care for our customers,” said Canada Life officials in an email statement.
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Still, the announcement is a “cost cutting move, nothing more” and the slashing of its IT staff nationally will do little to reassure clients Canada Life is serious about customer care, Levy said.
“It fails to recognize what these experienced people brought to the table. It is an unfortunate trend,” he said.
“It will have an impact on operations. It is tech that makes Canada Life possible. It is naive to think this will not impact customers.”
Outsourcing technology staff is part of a growing trend among businesses and Canada Life made a similar move in 1996 only to hire technology staff back, Levy said.
“This is a company that has outsourced technology services in its history only to restructure years later,” he said.
HCLTech is one of the largest tech providers globally, with 10,000 clients and offices in more than 60 countries with about 225,000 workers.
“People who designed and worked on that system for years will leave and be replaced by people who are not here,” Levy said.
“It is inevitable it will have an impact”
Canada Life has about 3,500 staff in London.
The move to cut IT staff also drew a backlash on social media as some on Reddit commented on the move.
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“Canada Life uses legacy systems that are, in technical terms, objectively ancient. How are they going to get support working from outside the organization?” asked one poster.
“Their workforce is already stretched incredibly thin across other departments. This isn’t going to end well.”
Canada Life clients took to Facebook to comment on the insurer’s page about delays with customer service.
“I would like to set up a Facebook page for all the Canada Life clients who are getting horrendous service . . . not paying out claims, not answering phone calls, and a very difficult website to navigate,” wrote Linda VanWeeteringen.
Added Andrew Garlock: “Been waiting four weeks to get a drug claim paid, been calling for the last two weeks, after 90 minutes on hold you get hung up on. Canada Life Co you need to do better.”
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