BofA is sending more work abroad
Technology, operations jobs on chopping block
Bank of America Corp. plans to cut technology and
operations jobs through the end of 2003 and, in the process,
replace some employees with lower-cost labor overseas.
The Charlotte-based bank has already slashed 12.7 percent
of its nationwide technology and operations work force to
22,000 this month from 25,200 in 2001. But more cuts are
planned, bank spokeswoman Lisa Gagnon confirmed Monday.
"We're going to be gradually reducing staff in technology
and operations only," said Gagnon. "We're working hard to make
decisions really quickly and eliminate the uncertainty. It's
too early to know who and what areas will be affected."
Since last October, 75 positions at the bank have been cut,
she said, because the bank is sending to India software
programming that is now done in-house. Some employees say they
are worried about their future and are upset that foreign
firms are taking their jobs.
The overall cuts are part of the bank's ongoing strategy to
reduce expenses nationwide. Outsourcing some technology
functions, such as software programming, is a small portion of
that strategy, Gagnon said. Other jobs that fall into the
technology and operations area include call center workers and
Bank of America, the nation's largest consumer bank, has
repeatedly declined to say how many jobs will be lost in its
cost-cutting effort. The bank has shrunk its work force by 6.7
percent during the past 12 months to 134,135 nationwide from
Gagnon said the technology and operations area is
considering all options, including a hiring freeze, cutting
travel expenses and layoffs.
In March, The Observer first reported the bank's plans to
outsource less than 5 percent of its technology operations to
overseas companies. Executives at Bank of America toured India
earlier this month. The bank has contracts with India
technology giants Tata Consultancy Services and Infosys.
The bank joins an increasing number of U.S. companies
signing contracts with India's technology firms to save money.
A recent survey of Fortune 1000 chief information officers
showed that the number of companies outsourcing more than 3
percent of their information technology budget to India
increased to 62 percent in 2001 from 32 percent in 2000.
The practice of outsourcing to India is also becoming
widespread within the financial industry, with Fidelity
Investments and First USA Bank being just a couple of the many
outsourcing with Infosys, according the company.
Charlotte's other big bank, Wachovia Corp., has said it has
no plans to send significant amount of technology work
overseas, but has performed some development and testing
Many of Bank of America's technology employees are at
Charlotte's Gateway Village, a main hub of Bank of America's
"The workplace is in turmoil and nobody is feeling safe,"
one bank employee said in an interview by e-mail, asking that
his name not be printed for fear of losing his job.
Printouts of an internal Web site posting earlier this
month, obtained by The Observer, confirm layoffs in the
technology and operations area and address employee concerns.
"Recently, you might have heard that a few associates were
displaced. This is true," states a posting by bank manager
David White. "It is also true that there could be future
impacts. ... We are in an adjustment phase, and I understand
that it can be unnerving.
"I apologize for that, but please know we are doing what is
best for the organization."
After a series of acquisitions, the bank has been
consolidating its operations and focusing on improving its
coast-to-coast business. In the economic slump, the bank has
performed well compared with its peers.
Last week, it beat analysts' estimates and reported a
third-quarter net income of $2.24 billion, or $1.45 per share,
up from $841 million, or $0.51 per share, reported a year ago.
Some of the company's technology employees, many of them
programmers with an average salary of $70,000 to $100,000, say
they are waiting to see who will lose their jobs next.
Laid-off employees said they have been asked to sign two
sets of papers: One states that the employee will receive two
weeks' severance for every year he or she worked for the bank.
The other says severance will be canceled if the employees
talk to the media or quit before a certain date. They've also
been asked to help train their Indian counterparts before
their final day.
A small group of current and former employees told The
Observer last week it was difficult to work with their futures
being uncertain. They worried about finding work and the
prospect of leaving Charlotte in search of high-tech jobs. A
few even talked of leaving the technology world.
"The days of being a developer at Bank of America are
numbered," said a programmer worried about supporting a wife
The employees declined to give their names on the record,
for fear of losing their jobs or severance.
A few were sipping beers, saying that it didn't matter what
they did because their jobs were gone anyway.
"I call it being fired," one programmer said.
Local Wachovia Corp. economist Mark Vitner said that while
the employment rate in Charlotte is better than it was six
months month ago, it's still relatively tough to find
high-paying jobs. There aren't a lot of big companies, such as
Bank of America, doing large-scale hiring, he said.
Another technology and operations employee is angry that a
bank with a red, white and blue logo is taking jobs away from
Americans by outsourcing to foreign companies.
The Charlotte-area resident was willing to have his name
published last week; then, on Monday, he learned his job was
being eliminated in the downsizing of his division. His
severance is being negotiated.
"I don't think this bank has the right to wrap itself in an
American flag," he said. "I feel very strongly from a
patriotic and love-of-Charlotte point-of-view that this is
something that Charlotte needs to know about."
Gagnon, the bank spokeswoman, declined to comment.