Massive bank layoffs signal risk and opportunity for outsourcing
Banks will have to address the issue of service level deterioration and regulatory concerns as they move to low-cost centres. December 02, 2011 | Aldo JosonEven as the crisis in Europe deepens and the markets brace itself for another plunge in confidence, banks are streamlining their operations and shedding their tech support via massive layoffs. While back-office operations will have to be addressed via outsourcing, banks will have to manage the cost-saving benefits from the risks of partnering with external providers. In September, Bank of America Meryll Lynch (BAML) confirmed that its five year plan to cut around 30,000 staff had already begun. The massive layoff which will see its workforce reduced by 6,000 this year alone is part of CEO Brian Moynihan's effort to save the company $5 billion. During his address to investors in New York, Moynihan said that the bank was "a much simpler company" than it was 24 months ago. With over 287,000 employees as of June, the staff cuts and the changes it has made to its consumer and small banking business, credit card operations, home lending, global operations and support areas will make it even simpler. Wells Fargo is also set to cut staff, but unlike BofA, it did not disclose how many it will ask to leave. It has disclosed its streamlining efforts dubbed "Project Compass", aims to reduce quarterly expenses to $11 billion in the fourth quarter of 2012 from $12.5 billion in 2011. Of the $12.5 billion, around $2.2 billion were expenses from technology and staff alone. Retail banks were not alone in their “a leaner staff” programmes as even investment banks and transaction banking giants justified the upcoming cuts as necessary. Global banks HSBC, UBS, Barclays, RBS, Credit Suisse, BNY Mellon, Goldman Sachs and JP Morgan have all announced layoffs, totalling 44,000. While not all of these are IT personnel, several of the banks such as RBS and Barclays have confirmed that some of the positions will be filled via offshoring. In Asia, HSBC has announced that it will axe 3,000 jobs in Hong Kong by 2013. This is 10% of their global plan to cut job... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Operational Risk & Security, Risk and Regulation, Technology & OperationsOperationalRiskSecurity,Risk and Regulation,technology, Operational Risk & Security,Risk and Regulation,Technology & Operations, Keywords:BAML, HSBC, UBS, Barclays, RBS, Credit Suisse, BNY Mellon, Goldman Sachs, JP Morgan, Outsourcing, Streamlining BAML, HSBC, UBS, Barclays, RBS, Credit Suisse, BNY Mellon, Goldman Sachs, JP Morgan, Outsourcing, Streamlining
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