Mumbai, April 25: One Wall Street giant is bringing what an Arizona minnow snatched away. JP Morgan Chase & Co is getting the jobs that eFunds took back home under pressure from Americans livid at layoffs.
The number two in the global pecking order of investment bankers plans to open an offshore research department in Mumbai, where Indian professionals will chew on numbers, prepare reports and, if things go right, track shares on New York Stock Exchange and Nasdaq.
More than 1,000 jobs could come to Mumbai but, more important, there are reports suggesting the move will not lead to unemployment in the US office. JP Morgan can hire a person at salaries that are a fourth of those in the US.
The decision to open another hub in India is an effort by the investment bank, the target of a tortuous probe by the Securities and Exchange Commission (SEC), is one in the series of initiatives to weather the slump that began in the aftermath of the September 11 attacks. Chances are that it will be let off with a stiff fine.
“It is a not a new strategy. Many multinationals have already set up back offices here,” said officials from JP Morgan in Mumbai. Fortune 500 favourites — General Electric and Ford Motors — have already set up back offices and call centres in India to save on costs.
According to a foreign agency report, the initiative will not lead to layoffs at the investment bank. The outsourcing of work to India will essentially be for mundane tasks such as collection of data, drawing up simple financial models and general number crunching.
The basic idea is to skimp on expenses. Already, several investment banks are doing it in India. Franklin Templeton, a leading mutual fund major after acquiring Chennai-based Pioneer ITI and bolstering its presence here, has shifted its back office jobs — calculating net asset values — to its Chennai hub.
Surely, more Wall Street jobs could pour in over the months ahead. “We haven’t decided anything yet,” said Nimesh Kampani, chief of JM Morgan Stanley, Chase’s rival here. “It needs to be studied thoroughly and we haven't applied our minds on this.” He would not say if his company had similar job-generating plans.
Analysts feel investment banks with operations in India are likely to contemplate opening more offices here. Wall Street has seen many institutions slash workforce. It includes the big investment banks like JP Morgan, JM Morgan Stanley, UBS Warburg and Goldman Sachs.
Many research hands at the firm’s office, however, said they had nothing to do with the plan. “It will have nothing to do with us. It is a separate office manned by completely different set of people.” Chase’s Indian research arm is housed in upscale Nariman Point here.