JP Morgan and the Vanishing Back Office

6 December 2005

1 minute read

As JP Morgan Chase plans to hire 4,500 graduates in India over the next two years, and offshore 3,000 back-office and support jobs to the subcontinent, could it be time to dust off the old JPMC resume?

The move represents 30% of the investment bank's back office and support staff and will focus on derivatives settlements. A spokesman for the bank tried to stem concerns about job losses, saying the new roles will be in addition to, not instead of, existing back office staff. He said graduate recruitment in the U.S. and U.K. would also continue as planned.

But Chris Gentle, an offshoring expert at Big Four accountancy firm Deloitte, says it just confirms an ongoing trend: "As long as pressure remains to improve efficiency there will be movement from near-shore to offshore centers."

What do you think? Is it time for Delaware-based bank employees to worry? Will other banks follow the leader?Let us know what you think.

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4 comments

Ia
Ian
12 December 2005
Some banks - e.g. RBS - have said they will not offshore jobs because they think it will play badly with their clients.
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Ia
Ian
6 December 2005
It seems to me that this could be the wrong way to save those pennies that would make up the bonuses of the front office. The bank might save some money but they would hardly gain reputation and best support from people who struggle to speak their language. Have you ever received a cold call from a mobile phone seller? Then you know what I mean.... We see the reverse trend of companies bringing back their call centers or back offices as their customers are livid. This could well be the end of JP Morgan. They will be up for an acquisition within a year of such a short-sighted move.
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Ia
Ian
6 December 2005
Like it or not, this is going to be the sad truth that back-office, and (increasingly) middle-office bank employees in developed countries will have to face. This situation bears uncanny similarities to the time when Japan (and more recently, China) established itself as an export base for low-end manufactured goods. Slowly, Japan became a global hub for production of the most hi-tech manufacturing and consumer-electronics products (Sony, Panasonic, Toyota, Mitsubishi, Honda are leading Japanese brands around the world today). So the writing is on the wall, this trend is going to be more pervasive than we all think. It's about time even every middle and front-office bank employee began to understand the effect such off-shoring might have on even their own jobs. For those who find this fact a bit too hard to swallow, I suggest reading this year's FT and Goldman Sachs Business Book of the year - The World is Flat. You have been warned!
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Ia
Ian
6 December 2005
There are primary (London, NY), secondary (Bournemouth, Columbus OH) and tertiary (Mumbai) locations, and the aim is to move folks/costs down the pyramid. In the process, Jamie Dimon will complete the transformation from a global investment bank into a US retail bank. (I am an ex-JPMC employee and would appreciate anonymity if my comment is posted. Thanks.)
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