Wells Fargo & Co. is preparing to outsource jobs in its institutional retirement division to India and the Philippines, according to an internal memo sent to employees. Some of those jobs will come from Charlotte.
No figures have been given for the number of jobs that will move overseas. The moves are part of the banks broader cost-cutting initiative that hopes to trim about $1.5 billion in quarterly expenses.
Its also another signal that big banks are continuing to look overseas for cheaper labor more than a decade after they began sending work to offshore third parties and service centers.
Wells Fargo has had locations in India and the Philippines for years, processing transactions and supporting business functions at a lower cost. According to a memo obtained by the Observer, over the past 12 months, the bank found it can save more money by expanding its presence overseas in those operations.
While the bank did not say from where U.S. jobs likely will be cut, Wells Fargos retirement division has a significant presence in Charlotte. The unit reports to David Carroll, head of wealth, brokerage and retirement, who is based in Charlotte and reports to CEO John Stumpf.
Some jobs at the banks Customer Information Center in north Charlotte are likely to be affected.
The bank confirmed the announcement but said no jobs have yet been moved. Wells Fargo has about 20,500 employees in the Charlotte area and says that figure should not change significantly.
Wells Fargo has thoughtfully considered building small teams overseas as a business strategy for many years, spokesman Josh Dunn said in a statement. Our customers are international, demand round-the-clock service, and expect faster turnaround for decisions and responses. Global expansion of our workforce allows us to do these processes faster, with more flexibility.
Wells Fargo is also moving service-center positions in the division to a bank facility in Waco, Texas.
Big U.S. banks began moving significant portions of their labor force offshore in the late 1990s, and the trend accelerated in the mid-2000s. That trend is starting to slow, although banks continue to look overseas, said Peter Bendor-Samuel, CEO of the Everest Group, a research and consulting firm that focuses on global services.
In its first-quarter earnings presentation, Bank of America Corp. said it had increased its offshore and contractor levels by one-third, to 16,000, in its mortgage unit while decreasing employee numbers elsewhere.
Wells Fargo, however, had historically taken a more conservative approach to offshoring than its peers, Bendor-Samuel said.
These new moves could be a sign that the bank is looking to expand on the results that Wachovia Corp., the Charlotte bank Wells bought in 2008, had with offshoring, though Wells Fargo has already moved a significant amount of work overseas itself.
This is a well-worn path, he said. Theyve already got a good base for doing this. But I dont think its a harbinger of an industry trend. The trend is actually a slowing of growth.