The AA said it expects the cuts in management and administrative roles at two of its insurance call centres in Cardiff and Newcastle will be achieved through voluntary redundancy and normal staff turnover.
As part of the restructuring the AA, which is now owned by two private equity firms following a £1.75bn takeover last year, said it is also investing £8m in new technology and telephone systems to improve the performance of the call centres.
Kevin Sinclair, managing director of AA Insurance, said the company "seriously considered" moving the call centres to India because it would have delivered long-term savings of £24m.
But he claimed the service from the AA's UK call centre staff will increasingly differentiate the company from competitors that have chosen to outsource to India.
"We have considerable belief in the commitment shown by our UK insurance call centre teams. The decision to keep our call centres in the UK is good news for customers, who will enjoy improved service and we will invest in the vital technology our staff use when customers buy insurance from us or make claims," he said in a statement.
Full consultation with the AA's recognised union, the AA Democratic Union, has begun but the GMB has hit out at the cuts.
Paul Maloney, GMB National Secretary responsible for GMB members at the AA claims the publicly announced job losses are just the "thin end of the wedge".
In a statement, Maloney said: "Since the venture capitalists took over the AA last year there has been a series of job cuts announced piecemeal. This is not the end of the road."
Talkback
It's good to see at least one UK company putting service over cost savings. I'm yet to have a 100% satisfactory experience of dealing with an Indian call-centre, with most encounters being frustrating at best. A female friend of mine was laughed at by an Indian call centre operator last week when she didn't understand a PC term, and she was trying to spend money with the comapny, so outsourcing has a long way to go to match the quality of a well trained UK operator.
What happened to the importance of customer relationships, and building a rapport with the person you're speaking to?
My advice, outsourcing may save you money, but deviate from the scipted responses at your peril!