Cost Cutting in New York, but a Boom in India

By: TraderMark Friday, August 15, 2008 10:37 AM

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err take advantage of cheap labor), an interesting piece in the NYTimes

India - On the top floor of a seven-story building in this dusty aspiring metropolis, Copal Partners churns out equity, fixed income and trading research for big name analysts and banks. It is a long way from the well-cooled corridors of Wall Street, and quarters are tight; business is up about 40 percent this year alone.
“This is one bulge-bracket bank,” said Joel Perlman, president of Copal, pointing toward a team behind an opaque glass wall. “And this,” he said, motioning across a narrow corridor “is another.”
The banks edit and add to what they get from Copal, a research provider, then repackage the information under their own names as research reports, pitch books and trading recommendations. (ah, so that's how it works)
Wall Street’s losses are fast becoming India’s gain. After outsourcing much of their back-office work to India, banks are now exporting data-intensive jobs from higher up the food chain to cities that cost less than New York, London and Hong Kong, either at their own offices or to third parties.
Bank executives call this shift “knowledge process outsourcing,” “off-shoring” or “high-value outsourcing.” It is affecting just about everyone, including Goldman Sachs, Morgan Stanley, JPMorgan, Credit Suisse and Citibank — to name a few. (I call it "Pooring of America" but let's just get focused on labels - we still have plenty of Walmart jobs, baristsa jobs, food service jobs, and tanning salon jobs left here! You can't take that from us!)
The jobs most affected so far are those with grueling hours, traditionally done by fresh-faced business school graduates — research associates and junior bankers on deal-making teams — paid in the low to mid six figures. (key words - so far - just like we said 10 years ago - the only jobs leaving are back office work... now we are giving up low to mid 6 figure jobs as well - and replacing them with $35K jobs in the "service economy")
New York City financial firms expect to hand out some $18 billion less in pay and benefits this year than 2007, the largest one-year drop ever. Over all, United States banks will cut 200,000 employees by 2009, the banking consultancy Celent said in April.
The work these bankers were doing is not necessarily going away, though.

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