Outsourcing from central Europe. I had claimed in the past that German firms were largely invulnerable to white-collar outsourcing. Maybe I was wrong. Maybe Deutsche Bank is no longer a German-language firm
FT.com / Home UK - Deutsche Bank in job exodus to India: By David Wighton in New York Published: March 27 2006 03:00 | Last updated: March 27 2006 03:00
Deutsche Bank will have moved almost half the back-office jobs in its sales and trading operation to India by the end of next year as part of a reorganisation that has already helped boost revenues by more than €1.9bn (£1.3bn).
The plan will triple its global markets staff offshore to nearly 2,000, according to industry estimates. The bank is also looking to increase offshore research staff from 350 to 500, more than half the present global total of 900.
Deutsche's move comes as other big investment banks are also rushing to take advantage of the low cost of highly educated staff in India. JPMorgan Chase hopes to hire 4,500 graduates in India in the next two years with the aim of transferring 30 per cent of back-office jobs at its investment bank offshore by the end of next year.
The moves highlight the shift in the use of offshore facilities from traditional areas such as information technology support and call centres to more high-value tasks.
Mark Ferron, chief operating officer of Deutsche's global markets business, said the expansion in India was part of a wider reorganisation that had generated significant revenue increases and cost savings.
Deutsche has spent two years on the reorganisation, which is designed to break down the traditional product "silos" of debt and equity, cash and derivatives.
The motivation was partly cost reduction. "It was like Noah's Ark, we had two sets of everything," Mr Ferron said. But it also reflected the changing needs of clients who are demanding more complex transactions often involving different asset classes.
About 15 per cent of operational staff in Deutsche's markets business are offshore and the bank plans to lift this to 40-50 per cent by the end of next year.
Other investment banks expan-ding offshore include UBS, which next month will open its first centre in Hyderabad with an initial capacity for 500 jobs. Lehman Brothers expects to double its numbers in India to 1,000 this year and Credit Suisse is considering offshore expansion.