More evidence of the global relocation of white collar labour today. The week before last, Citigroup announced it was to cut 17,000 jobs, and relocate 9,500 to India and other "lower cost locations". Today we read of another bank slashing jobs in the west and offshoring others: Barclays to Shift 10,800 Jobs to India, Elsewhere to Cut Costs, according to Bloomberg reporters Subramaniam Sharma and Chitra Somayaji:
Barclays Plc plans to shift 10,800 jobs to India and other low-wage countries, betting reduced costs will help win support for its acquisition of ABN Amro Holdings NV, the world's largest financial services takeover. Barclays, Britain's third-largest bank, will also slash about 12,800 jobs to pare expenses by 2.8 billion euros ($3.8 billion), the banks said in a statement today.
Barclays, based in London, today agreed to buy ABN Amro for 67 billion euros. Salaries in insurance, banking and finance in India may rise 16.5 percent this year, driving the fastest wage growth in Asia, according to Hewitt Associates Inc. Aviva Plc, HSBC Holdings Plc and Standard Chartered Plc have hired back-office staff in India, where a financial analyst costs as little as a quarter of counterparts in Europe, Paul Abraham, managing director of ABN's global support unit, said last month.
...Barclays Chief Executive Officer John Varley today said the London-based bank will move staff to "low-cost'' locations including India, without elaborating. Barclays's acquisition of Amsterdam-based ABN Amro will create a bank with about 217,000 employees and 47 million customers stretching from India to Brazil.
Barclays plans to slash almost 6 percent of the combined workforce, excluding Chicago-based LaSalle Bank...."Part of the expected staff reduction will be through establishing shared services and offshoring those positions to low-cost locations, such as India where new staff will be recruited at ABN Amro's existing'' operations, the banks said in the statement. "The reduction in staff is a necessary part of the envisaged synergies from the combination of the two banks.''
ABN Amro, which employs about 4,000 back-office workers in six offices in Mumbai, Chennai and New Delhi, plans to hire as many as 2,000 more people in India by March, Lars Gustavsson, global head of the services unit, said on March 15.
Global banks have been ripe for restructuring, with many 'back office' jobs in particular not needing to be done in the same location as sales or trading. Some banks and insurance companies have been quietly shifting those jobs to India and elsewhere for years, of course. But relocation seems to be accelerating, as Indian expertise improves and capacity to deliver grows apace.