Bank Outsourcing, Will it Hurt Downtown

[monsoon]

The local Fox news channel has announced that Wachovia is going to outsource another 4000 Information Technology jobs to India. They claim this will save them $1 Billion (presumably they will layoff the people here to achieve those savings). And their rival across the street, BofA, has quietly opened a subsidary in India as well had has been quietly laying off people and sending the work to India.

(Where is Governer Easley now? He always comes to Charlotte to stand on the podium when new jobs are announced here.)

Given these are farily high paying jobs and mostly located in the city of Charlotte, wil these kind of losses hurt development downtown?

[Nomanizan]

The jobs that are being shipped to India are not typically the jobs of of employees downtown. For Wachovia, the layoff's will most likely be cut at the facility off Harris Blvd. Most of BofA's tech jobs downtown support traders. These jobs arent going anywhere. Whenever BofA announces job cuts or outsources, the jobs cut are typically never the trader support functions. I have been with BofA for 8 years, Global Corporate and Investment Banking has grown rather than decreased over the years. I dont think these cuts will hurt downtown.

[ElricSeven]

The jobs that are being shipped to India are not typically the jobs of of employees downtown. For Wachovia, the layoff's will most likely be cut at the facility off Harris Blvd. Most of BofA's tech jobs downtown support traders. These jobs arent going anywhere. Whenever BofA announces job cuts or outsources, the jobs cut are typically never the trader support functions. I have been with BofA for 8 years, Global Corporate and Investment Banking has grown rather than decreased over the years. I dont think these cuts will hurt downtown.

<{POST_SNAPBACK}>

Funny how management never seems to see a need for outsourcing their own jobs. I'm sure India can supply a few excellent CFO's willing to work at a huge discount.

[cinco]

i am very perplexed by outsourcing...business wise it makes perfect sense, but i don't know if we have yet to truly see the ramifications it causes to our OWN people. i do know there was this guy running against this other guy for the leadership of this country. the guy who lost had a plan that involved tax incentives for companies that keep jobs in the U.S. this plan intrigued me very much and would have liked to seen it tested.

i do think because of the nature of charlotte's business (banking, money) that outsourcing and globalization - will benefit charlotte. in the long run, i foresee many problems overall.

[monsoon]

Neither Kerry or Bush, if that is who you were referring too, would have done anything to stop it. Kerry has voted many times over his long tenure in the Senate on so called "free trade". (Its never free) In choosing between democrats and republicans, you are only deciding the kind of boot that will be on your neck as both parties have sold out to the corporations.

If you wanted someone who would really vote to change the status quo, you have to vote for Nader's party, but that doesn't stand a snowball's chance in hell with the two major parties agreeing to at least do everything they can to keep third parties out of the elections.

[cinco]

Neither Kerry or Bush, if that is who you were referring too, would have done anything to stop it.  Kerry has voted many times over his long tenure in the Senate on so called "free trade".  (Its never free)  In choosing between democrats and republicans, you are only deciding the kind of boot that will be on your neck as both parties have sold out to the corporations.

If you wanted someone who would really vote to change the status quo, you have to vote for Nader's party, but that doesn't stand a snowball's chance in hell with the two major parties agreeing to at least do everything they can to keep third parties out of the elections.

<{POST_SNAPBACK}>

could not agree with you more...but because it is going to be very hard to squeeze in a third party (nader wasn't even allowed to debate) - one can only go on one's record and their word. when kerry voted those many times he was voting with the majority of the senate. at that time there was alot of optimism in "free" trade. but when your constituints start losing jobs, you have to rethink. IMO dem's are rethinking outsourcing platform. tax incentives to keep jobs here just seems worth trying, and if you were to pick a person to head that - i would pick the one who at least talks about it rather than the one who says (does) nothing.

monsoon, i am interested to see what you think about how wachovia's move will effect charlotte. i mean, fortune 500's have been practicing outsourcing since (even before) NAFTA passed. in that time charlotte has grown @ a decent pace - which is promising since our country overall has been slightly depressed.

[SmellyCat]

Outsourcing will eventually cut into the "front line" jobs as well. I believe investment management and advisory positions, at least at the individual - not institutional - level, will be outsourced to India. It's a matter of time, maybe 5 years from now it will be in high gear. As we all know, their workforce is extremely educated.

[monsoon]

monsoon, i am interested to see what you think about how wachovia's move will effect charlotte.  i mean, fortune 500's have been practicing outsourcing since (even before) NAFTA passed.  in that time charlotte has grown @ a decent pace - which is promising since our country overall has been slightly depressed.

<{POST_SNAPBACK}>

Charlotte has managed to grow at a decent pace because outsourcing has not hit here full force yet and many people have moved here where all of the jobs have alread disappeared. This is the reason that most people you meet or know in Charlotte these days has lived here less than 10 years am many less than 5. Charlotte has been gaining due to the pain being felt elsewhere.

During the heyday's of banking over the last couple of decades BofA and Wachovia have managed to grow employees here by digesting other banks and laying off people elsewhere. Now that these days are mostly over with, their cost cutting will have to be focused on their current operations. Now I wish that companies would not look at the short term as Wachovia has done in this latest layoff and instead look at how they could leverage those people to grow new business. But I am afraid the management structure is incapiable of doing this.

A good case study is Toyota. They never layoff people yet their business continues to grow and tney have now become a serious threat to both Ford and GM who can't seem to figure out what to do.

I remember once hearing the CBD employment numbers were somewhere around 65K workers. Now its been stated here that it is around 45K. Did we actually lose 20K workers in 10 years?

[skysdalimit]

I don't think so, if anything we have gained employees.

[Sabaidee]

Toyota isn't an American company and Americans aren't satisfied with American products anymore. Americans are demanding for more foreign products. Toyota may seem financially fit here in the US, but in its homebase, its growth is stagnant. Japaneses tend to save more than they spend, they're the only culture that saves more than a quarter of their income, and their interest rate has been hovering around 0% for the past decarde. The average American only save 3% of their income verus the suggested 10%.

[SmellyCat]

Toyota isn't an American company and Americans aren't satisfied with American products anymore.  Americans are demanding for more foreign products.  Toyota may seem financially fit here in the US, but in its homebase, its growth is stagnant. Japaneses tend to save more than they spend, they're the only culture that saves more than a quarter of their income, and their interest rate has been hovering around 0% for the past decarde. The average American only save 3% of their income verus the suggested 10%.

<{POST_SNAPBACK}>

Actually I've heard the American savings rate is closer to 1%. Scary stuff.

[monsoon]

I was referring to Toyota USA. Almost all of the Toyota's on the road in North America were produced here as well. However its clear their Japanese management style is better than what we see with US companies.

[monsoon]

I don't think so, if anything we have gained employees.

<{POST_SNAPBACK}>

Provide some numbers and the source where you got them, please.

[skysdalimit]

Provide some numbers and the source where you got them, please.

<{POST_SNAPBACK}>

Well I'm just saying, it's basic simple math and really common sense. In the past 10 years uptown has gained over 1 million sq. feet of office space. Office vacancies have remained the same, if not lessened, therefore, you have more people taking up offices which means more employees uptown. We most certainly have not lost anyone, probably gained at least 5k in the past 10 years, bringing the total to somewhere around 60k, b/c about 5 years ago I heard it was a little over 55k.

[Sabaidee]

Actually I've heard the American savings rate is closer to 1%.  Scary stuff.

<{POST_SNAPBACK}>

That is scary, that 3% was 2000 data, which was collected in the 90's...damn Micro/Macro Economics. I still consider the US very lucky regardless of the outsourcing, our unemployment rate is extremely low compared to other industralized countries. When we had our high around 5%, that was considered low for European countries. I remember taking French class, and my French teacher is actually German-French, and where she originally from, teenagers aren't allowed to have part time jobs as it interfere with job market. Yes, US automakers should turn to the Japanese automakers's model, build plants and have major operations in places for their demand are high. The current US carmaker is consist of having multibrands umbrella under Ford or GM. GM needs to eliminate some brands, while Ford is doing better than GM with only half of its brand are of American origins, Ford is controlling Japanese brand Mazda and some English brands, Land Rover and Jaguar. That's why American automakers is focusing on their marketshare in China and building plants there. Also Bank of America is focusing on controlling shares of foreign banks in China and Mexico.

[Nomanizan]

Funny how management never seems to see a need for outsourcing their own jobs.  I'm sure India can supply a few excellent CFO's willing to work at a huge discount.

<{POST_SNAPBACK}>

Thats a wierd response. I'm not in management and I wasnt refereing to management jobs. Oh well....

[monsoon]

Well I'm just saying, it's basic simple math and really common sense.  In the past 10 years uptown has gained over 1 million sq. feet of office space.  Office vacancies have remained the same, if not lessened, therefore, you have more people taking up offices which means more employees uptown.  We most certainly have not lost anyone, probably gained at least 5k in the past 10 years, bringing the total to somewhere around 60k, b/c about 5 years ago I heard it was a little over 55k.

<{POST_SNAPBACK}>

Did you take into consideration the office space that has been removed during the period and vacancy rates? The building of I-277 took out square miles of office space. I don't think you can make the assumption there are more people working downtown simply because we have a few new towers. There is a former IBM facility on Harris Blvd that at one time had more floor space than all buildings in downtown, that sits fairly empty today.

[ElricSeven]

Thats a wierd response. I'm not in management and I wasnt refereing to management jobs.  Oh well....

<{POST_SNAPBACK}>

It wasn't a response, just an observation that those who decide to cut or offshore jobs never seem to consider cutting or offshoring their own jobs. This in spite of the fact that those executive jobs are not location dependent either. I like to spot inconsistencies in logic, especially where there are conflicts of interest involved.

[catdaddy]

i dont think it will. charlotte has very important jobs in its uptown area. i dont think they will send those jobs over seas

[skysdalimit]

Did you take into consideration the office space that has been removed during the period and vacancy rates?  The building of I-277 took out square miles of office space.  I don't think you can make the assumption there are more people working downtown simply because we have a few new towers.  There is a former  IBM facility on Harris Blvd that at one time had more floor space than all buildings in downtown, that sits fairly empty today.

<{POST_SNAPBACK}>

Did you take into consideration that 277 has been there for at least 10 years? Therefore no offices have been destroyed in the time period we are discussing due to 277. I'm sure there has been SOME office space removed, but far far far less than has been built. Obviously Charlotte has more uptown employees now than it did 10 years ago, or any time for that matter.

[monsoon]

Did you take into consideration that 277 has been there for at least 10 years?  Therefore no offices have been destroyed in the time period we are discussing due to 277.  I'm sure there has been SOME office space removed, but far far far less than has been built.  Obviously Charlotte has more uptown employees now than it did 10 years ago, or any time for that matter.

<{POST_SNAPBACK}>

My original intent was to discuss the last 20 years but I did word it 10 years. I asked for a verification of what the downtown working population is. So far you have only offered opinion which is fine if that is all that you have but it doesn't answer my question.

[skysdalimit]

Well, it is fact that several buildings have been built uptown in the past 10 years, so it is only logical, with vacancies rates staying the same, or either dropping, that there are more uptown employees. No, I do not have hard statistics for you, I am just using common sense.

[hueion39]

Outsourcing is good.

I wish people would refer to it's real name... the law of comparative advantage.

[SmellyCat]

yeah, but it's just a lot easier to tell people that "my job's been outsourced" rather than "my job's been eliminated due to the economic law of comparative advantage"

[skysdalimit]

Outsourcing is good.

I wish people would refer to it's real name... the law of comparative advantage.

<{POST_SNAPBACK}>

How is outsourcing good for the people? That is what I am wondering.