AO World, the online electrical goods retailer, has announced it is outsourcing up to 200 UK call centre roles to South Africa, blaming rising labour costs, while simultaneously reporting a 145% jump in profits and distributing £20m to shareholders.
Profit Surge and Shareholder Returns
On Wednesday, AO reported that pre-tax profits had risen 145% to £50.5m in the year to 31 March. The company is handing £20m in special payments to shareholders, reflecting its strong financial performance.
Call Centre Job Moves
Approximately 150 roles in phone sales and enquiries have already been transferred from AO's call centre in Bolton to South Africa over the past 12 to 18 months. A further 50 positions are expected to be moved as UK employees leave voluntarily, rather than through redundancies. More than 100 roles handling complex customer queries will remain in the UK.
AO said its overall employee numbers fell by 340 to 2,800 in the year as it made efficiencies across the business. The company expects to save about £4m annually from the call centre shift.
CEO Blames Government Policies
John Roberts, founder and chief executive of AO, said the move was necessary to keep prices low for shoppers. He criticised government policies, stating, 'Costs walk into the business on legs and this government keeps making those costs even higher and even less flexible.' He added that the government is 'accelerating the cost equation' while technology reduces costs and improves capability.
Roberts also highlighted rising unemployment in Britain, particularly among young people, and blamed 'terrible government decisions' for making it more expensive and risky to hire inexperienced workers. He echoed criticism from Next boss Simon Wolfson regarding new rules that will require employers to offer minimum hours to staff on zero-hour or short-hour contracts, potentially making it harder to hire temporary staff during peak periods.
Business Performance and Future Plans
AO reported an 11.4% increase in sales to nearly £1.3bn for the year. TV sales surged 17% in May as households prepared for the men's football World Cup, for which both England and Scotland have qualified. The company also conducted a small-scale trial of robotics in its warehousing operations, with encouraging early results leading to further tests.
AO noted that inflationary pressures from changes to national insurance and the national minimum wage in April 2025 had a material impact on operating costs of about £8.5m year on year. Despite these challenges, Roberts said the group now has 'the strongest balance sheet in our history.'
The company, founded after a £1 bet in a Bolton pub in 2000, has grown rapidly by selling household appliances online. After suffering from international expansion problems and a post-pandemic slump, AO recently acquired resale specialist MusicMagpie and launched a dedicated mobile phone selling site.
