U.S. financial services giant Morgan Stanley is planning to save up to $1 billion by outsourcing some of its jobs to low-cost countries in Asia and Eastern Europe. According to USA Today, the bank has already slashed 25% of jobs in its fixed-income and commodity units as part of the restructuring and eliminated 1,200 jobs as it exited certain areas of trading, such as Asian distressed debt.
The new restructuring plan will be implemented by the end of 2017. “We have too many employees based in high-cost centers doing work that can sensibly be done in lower-cost centers,” said James Gorman, the bank’s chief executive, according to a Reuters report.
Like technology firms, Morgan Stanley is also mulling the idea of automating some jobs by making the most of new technologies such as robotic process automation. The process of automating jobs is likely to begin in Bangalore, India’s outsourcing capital where the U.S. bank has recently opened an 184,000-square-foot office. Large enough to house 1,400 staff, the Bangalore office will support the firm’s technology and fund services businesses.
Morgan Stanley has a similar office in India’s commercial city of Mumbai, where about 2,400 people are working. The bank also has two large hubs in Budapest, according to Reuters.
Cost cutting is already yielding better results for the company. The bank’s forth quarter result beat analysts expectation.
Moreover, banks are better positioned when it comes to outsourcing. International banks are important customers for most of India’s outsourcing firms, with F&A service becoming a major domain for many of them.
In October last year, Morgan Stanley joined hands with Goldman Sachs and JPMorgan Chase & Co to form a data-management company. This move is believed to be a major step towards outsourcing many of its back- office functions.