AO World recruits more staff in South Africa after UK tax rises

AO World Plc is replacing UK call center employees with recruits based in South Africa, as the online household goods retailer hit out at higher taxes and other costs on businesses imposed by the British government.

The South Africa call center, with 150 staff, has saved about £2 million ($2.7 million) since opening about a year ago, AO World said Wednesday as it reported its latest results. Savings are expected to reach £4 million. More recruitment in South Africa will result in the majority of customer calls being taken overseas by the end of this fiscal year, it said.

It’s the latest evidence of retailers feeling the strain in the UK after the Labour government raised business taxes and boosted the minimum wage since coming to power. Britain’s largest retailers have shed almost 18 000 jobs in the past year as they grapple with the changes.

“In the short term we don’t see that we’re likely to get many more business-friendly policies,” AO World’s Chief Financial Officer Mark Higgins said in a phone interview. “So we will continue with the general investments we’re making, whether that’s in AI or automation or continuing to recruit offshore and protect us against some of the policies of the current government.”

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