Call centre firm Firstsource has warned 500 employees in Middlesbrough and Thornaby their jobs are at risk.
A 90-day consultation period is underway for the company to investigate how many jobs it is able to salvage, and a spokesperson for the company said they were optimistic that many workers could be transferred to other areas.
Firstsource is an international provider of customer services and data processing, with bases in the UK, India, Australia and the U.S.
The company confirmed that client requirements had reduced and had a knock-on effect that may result in employee cuts.600 staff were taken on in May after claims for PPI rose considerably.
Roles provided for Barclaycard in Teesside have been threatened, and workers at a centre in Thornaby are likely to lose out.
Firstsource said colleagues made redundant would be offered support through advice and training, while many whose jobs are at risk will be offered alternative posts.
A spokesperson for Firstsource said: “In the last year, we had been building up our staff numbers in the area of PPI claims handling in response to Barclaycard’s additional requirements.This surge of claims has reduced and as a result, we now need to scale down our staff numbers.
“One of the reasons why clients outsource to us is to provide flexibility in response to immediate requirements, so that they can quickly scale up operations when there is a surge in work.”