Thread regarding Bank of New York Mellon Corp. layoffs

The noose is tightening - new SEC disclosure rules coming. Offshoring will finally be exposed.

Companies push jobs offshore because companies are not required to disclose where in the world employees are physically located and the cost savings to the company are incredible.

A corporation will do ANYTHING - even highly if its questionable and highly unethical unpatriotic behavior - to "win". Labor in particular recently has bore the brunt of these terrible anti-labor corporate behaviours.

Here is what they been doing (and its not just Wells Fargo):

If a corporation fires 1000 American workers and hires 1500 workers who are physically located in India, on the annual corporate disclosure reports the corporation can report they added 500 jobs. They are not currently under any mandate to admit that 500 jobs were actually created in India.

And its why in Teamworks the total employees does not seem to change much - chainsaw is nearly 1:1 replacing you and your American colleagues with Indian nationals in India. This also includes managers - managers are also being transitioned.
Fire 1 American hire 1 Indian, Teamworks would show a net change of zero, the total count of employes would be steady and unchanged.

USA has labor laws on the books to help protect American workers - getting a green card or H1B visa is a tightly regulated highly coveted process. American salaries are so high when compared globally that immigrants flood America's southern border with hopes that even working illegally they would make far more being an illegal immigrant doing nasty jobs in usa than they would make in their home country.

But - "technological advances" for office jobs have created a conundrum for regulators. Today, a corporation can hire an Indian sitting in India to work a job that would have gone to an American through the use of technology - in specific VDI's and remote desktop - that makes the work experience in India near equal to those employees who sit in America.

Why do companies do this?

Simple - cost. The average salary at the bank is about $65,000 per year + expensive health care benefits + social security tax + unemployment tax + expensive realestate office + state tax. Total cost of 1 American worker easily exceeds $80,000 per year.

And in India?

A lot less - the average income in India is around $20,000 per year. Health care is so cheap the bank offers the employee FREE health care not only to the employee, but the employees children, spouse AND the employees parents. Total cost to employ one Indian? Less than $30,000.

That means for every American employee the bank displaces SAVES the bank over $50,000 per year - now you understand why chainsaw is so eager to cut Americans and hire Indians.

If the bank cuts 5000 American employees per month (and they are), the net savings to Wells Fargo is over $250,000,000 per year. Multiply that by 12 months its over $3,000,000,000 per year in REOCCURING annual savings.

But - there is a new sheriff in town:
https://www.cnbc.com/2021/08/20/the-sec-wants-to-know-how-well-companies-are-treating-their-workers.html

At the Federal SEC level:
"Investors want to better understand one of the most critical assets of a company: its people. I’ve asked staff to propose recommendations for the Commission’s consideration on human capital disclosure. This could include a number of metrics, such as workforce turnover, skills and development training, compensation, benefits, workforce demographics including diversity, and health and safety."

And that is not all - currently, Wells Fargo is based in California. A new bill has just been proposed to "induce" employers to disclose more worker information, including where in the world all these employees are located:

"The California State Controller is working with the Drucker Institute on worker metrics and currently has a bill in front of the California legislature to require companies with more than 1,000 employees to disclose human capital metrics."
https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=202120220AB1192&showamends=false

So what does this all mean?

The tide is shifting. Corporate bad behaviour against labor is soon coming to an end.

Cheating labor is about to get exposed and corporations are ill-prepared for the harsh political backlash that is coming.

Game over chainsaw.

You got your money, I fully expect for you and your ilk to move on before these rules become law.

Good riddance.

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Post ID: @OP+1cvUWHqd

10 replies (most recent on top)

@srfo,
The issue is, it does NOT make us more competitive. You think people just joke about how they hate talking to someone in India for customer service?
And you're clueless if you think the IT talent in India is anywhere near what it is hear. The few who are competent are already working state side for almost as much as the US citizens.
Also, if it's all about profit why do we spend all this money on woke causes that make us nothing? Or move the jobs to China or Serbia?
But the point of this whole article is having companies be transparent about where their workers are located. That way investors and customers know what they're paying for.

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Post ID: @saym+1cvUWHqd

It’s not a problem at all. We need to be cost competitive to survive. It’s true that offshored operations positions are pretty much scripted jobs with no real thinking. It’s also true that that the onshore Jobs which have been displaced generally had the same issue at a much higher cost.

When it comes to tech jobs the case is very different. Many of our offshore tech resources are every bit as talented or more than U.S. workers.

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Post ID: @srfo+1cvUWHqd

The problem is Immigration Policy. Ease the immigration norms and bring them over here, your tax base increases. You get productive people (some clumsy ones too) to support your ageing population. End of the day, your grandparents need to stand in line to get the medical care on the shoulders of these immigrants (not from the American youth - and that is reality due to the dwindling population growth). More over American youth inherit significant wealth which does not result in payroll taxes.

Stupidity (political or otherwise) stopped the legal immigration (and the ensuing tax base) so the jobs went out FURTHER reducing the tax base. This is backward thinking.

American policy makers (both the parties) in the name of protecting the jobs here have made it worse. This is not NAFTA where the unions drove the jobs to Mexico. This is where the jobs are held in US with people moving in - repopulating (though with different skin colors). And the best part is they are the cream of the Indian and Chinese society with high paying jobs and motivated parents which results in highly educated society with more high-skilled population as second generation .

Based on the same thought process it is not only 50,000$ savings to the firm, but 15% of 80,000$ - 12000$ payroll taxes LOST FOREVER. But your bills to support this person in US is not going away. Whereas, if one had brought that immigrant here - even for a lesser pay - 50,000$ instead of 80,000$ the loss is minimized - PLUS there is next generation that is there to SUPPORT.

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Post ID: @pjnj+1cvUWHqd

Sorry but offshoring processes will not end. As long as they keep some in the states as oversight they will avoid this.

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Post ID: @cmle+1cvUWHqd

Offshoring is a 1990's strategy that worked about as well as outsourcing. Most successful companies dumped it when they saw there was no real savings and that you get what you pay for.

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Post ID: @2vod+1cvUWHqd

Offshoring will continue unabated. The filthy rich only care about money, not people. They are designing robots to ki-l people so they don’t need to worry about the police ki----g the millions of underemployed, opioid hooked, well armed men and women who turn desperate. The human species is a total failure.

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Post ID: @1xfu+1cvUWHqd

It's not only India... In early 2000s my employer told all software managers to staff projects with Java developers from China because they were cheaper ($5/hour) than India ($7/hour).

More specifically to this topic: Ok, companies will have to disclose metrics but if who will audit those numbers?

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Post ID: @1ljz+1cvUWHqd

I don’t think it will matter. It’s just another evolution of business. It is not unique to our industry nor to any one specific company.

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Post ID: @1exj+1cvUWHqd

Great post. Let's hope that some action--Federal action--is taken regarding this.

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Post ID: @1oxv+1cvUWHqd

And the chickens are finally coming home to roost!

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Post ID: @1hal+1cvUWHqd

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