Vanguard to Shift 1,300 Jobs to Infosys

[Midpack]

According to the article, this only impacts defined contribution plans (so far).

Vanguard is shifting about 1,300 positions supporting its full-service recordkeeping client administration, operations and technology functions to outsourcing partner Infosys as part of a new strategic partnership between the companies that was announced Tuesday.

Vanguard had about 17,600 employees as of Jan. 31.

The impacted employees currently work within Vanguard’s Institutional and Information Technology divisions, Farrell pointed out.

The companies will provide a cloud-based recordkeeping platform that Vanguard said will enable “greater insights and unprecedented personalization to help deliver better outcomes for nearly five million participants and 1,500 sponsors.”

All Vanguard employees currently serving in full-service recordkeeping client administration, operations and technology function roles will be offered comparable positions at Infosys in close proximity to Vanguard’s offices in Malvern, Pennsylvania; Charlotte, North Carolina; and Scottsdale, Arizona, Vanguard said.

“Transitioning employees will receive the same salary, comparable benefits for a transition period of 12 months, plus meaningful incentive opportunities,” Vanguard said. The transitioning Vanguard crew will report to King and Mohit Joshi, Infosys president.

https://www.thinkadvisor.com/2020/07/15/vanguard-to-shift-1300-jobs-to-infosys/

 

[MRG]

Interesting, I didn't Infosys was involved in this industry.

 

[Toocold]

Another offshoring of jobs...

 

[MichaelB]

Another offshoring of jobs...

No, it’s outsourcing, not offshoring, as the article clearly points out.

All Vanguard employees currently serving in full-service recordkeeping client administration, operations and technology function roles will be offered comparable positions at Infosys in close proximity to Vanguard’s offices in Malvern, Pennsylvania; Charlotte, North Carolina; and Scottsdale, Arizona, Vanguard said.

 

[JoeWras]

No, it’s outsourcing, not offshoring, as the article clearly points out.

For 12 months. And then... ?

A lot of us have seen this pattern before, have lived through this pattern. It rarely ends with all jobs staying in the USA. Or, the new jobs are formed in the offshore arm of the company.

I'm disappointed in Vanguard on this. I'm not pulling any money out yet, but no more new money is going in.

 

[24601NoMore]

Having worked in IT my entire career, I'm pretty familiar with Infosys and the playbook here.

While the article does say that "transitioning" employees will receive the same salary and benefits for 12 months, what it leaves out is what will likely happen after that 12 month period has ended.

The 12 months is most likely so that the "transitioning" employee can train their Indian replacement (with "incentive" to do so - ie: you keep your job for now, even though everyone knows it will go away at the end of the 12 months), who will likely work for 25-30% of the cost (if that) of the "transitioning" employee and who likely has far less benefits.

We've seen this play out in Global 2000 companies time and time again. And while it will save VG customers like us some on the cost side of the equation, it's almost guaranteed that the quality of service will drop significantly once those former VG employees have completed their 12-month "transition" and the new crew takes over..

And if you think VG IT and website is bad now.. just wait until Infosys gets done "improving" things. I haven't seen a single Infosys implementation (and I've seen dozens if not hundreds) that's worth anything. There is a HUGE difference in quality between what American IT workers can build and what cheap Indian offshore labor can build. There's really no comparison - and I say this as someone that used to sell Consulting Services that included both American (expensive) and Indian (very, very cheap) resources.

ETA - I just noticed that this is apparently only for defined contribution plans (for now). But still...not a good sign of things to come, as these things typically morph once senior management sees all the cost savings and totally ignores the quality of the implementation.

 

[MRG]

For 12 months. And then... ?

A lot of us have seen this pattern before, have lived through this pattern. It rarely ends with all jobs staying in the USA.

I'm disappointed in Vanguard on this. I'm not pulling any money out yet, but no more new money is going in.

Nah, those jobs are not going overseas. Outsourcing in this industry, many others too, is the rule not the exception. I spent a career supplying services for the financial services industry and your money or information doesn't leave the country. It may be outsourced, the majority is, and you will never know.

 

[Sunset]

For 12 months. And then... ?

A lot of us have seen this pattern before, have lived through this pattern. It rarely ends with all jobs staying in the USA. Or, the new jobs are formed in the offshore arm of the company.

I'm disappointed in Vanguard on this. I'm not pulling any money out yet, but no more new money is going in.

+1
Weirdly, just this morning I was thinking Vanguard would be fine for some long term holdings, but this turn of events makes me concerned.

We've been in the IT industry, and have seen this pattern before. I'm not willing to risk a pile of assets exposed to a disappearance suddenly happening outside the Country, where laws are different.

 

[harley]

and you will never know.

Until the first time you call. It's usually pretty obvious.

 

[leftyfrizzell1963]

Having worked in IT my entire career, I'm pretty familiar with Infosys and the playbook here.

While the article does say that "transitioning" employees will receive the same salary and benefits for 12 months, what it leaves out is what will likely happen after that 12 month period has ended.

The 12 months is most likely so that the "transitioning" employee can train their Indian replacement (with "incentive" to do so - ie: you keep your job for now, even though everyone knows it will go away at the end of the 12 months), who will likely work for 25-30% of the cost (if that) of the "transitioning" employee and who likely has far less benefits.

We've seen this play out in Global 2000 companies time and time again. And while it will save VG customers like us some on the cost side of the equation, it's almost guaranteed that the quality of service will drop significantly once those former VG employees have completed their 12-month "transition" and the new crew takes over..

And if you think VG IT and website is bad now.. just wait until Infosys gets done "improving" things. I haven't seen a single Infosys implementation (and I've seen dozens if not hundreds) that's worth anything. There is a HUGE difference in quality between what American IT workers can build and what cheap Indian offshore labor can build. There's really no comparison - and I say this as someone that used to sell Consulting Services that included both American (expensive) and Indian (very, very cheap) resources.

ETA - I just noticed that this is apparently only for defined contribution plans (for now). But still...not a good sign of things to come, as these things typically morph once senior management sees all the cost savings and totally ignores the quality of the implementation.

Above is exactly what happens. They don't broadcast the events after the 12 months is up. Most employees lose their jobs, the costs go down and the quality goes down too, and the executives get a mega bonus for the cost savings to the bottom line...without regard to the impacts to their customers. It's sorry, but its pretty common among US executives to throw thousands of their fellow citizens out of work for a quick buck for themselves.

 

[TechLead]

It is a global economy. Outsourcing those jobs does not necessarily mean low quality work. Looks to me those are IT jobs.

Some of the best of best engineers working in US are off Indian origin. They are also some of the best payed. (My personal experience)

Personally I own Vanguard ETFs but I don't have brokerage account with them.

 

[24601NoMore]

It is a global economy. Outsourcing those jobs does not necessarily mean low quality work. Looks to me those are IT jobs.

Some of the best of best engineers working in US are off Indian origin. They are also some of the best payed. (My personal experience)

Personally I own Vanguard ETFs but I don't have brokerage account with them.

Hmmm..I've had the exact opposite experience, and I've worked for some of the largest Silicon Valley companies selling software and Professional Services to the largest of the Global 2000 firms. I even spent a few years working for an India-based Consulting company selling PS after they acquired a NY-based PS company that had been around for ~25 years doing work primarily for Wall Street firms. The net was that we had American IT Consultants (the NY guys) and Indian Consultants (some in the US but many offshore). With a (very few) exceptions, there was a HUGE difference in quality of what was built.

I have nothing against Indian-based IT companies or workers, but I've worked for Indian-based companies and have had customers that they've done implementations for going back nearly 35 years. It's very rare that you see higher quality and almost never higher pay. The whole "play" by American companies is to wipe out expensive, American-based IT workers and replace them with less expensive workers from India, China, Russia and elsewhere. In the Indian company I worked for's case, my American Consultants went for $200 - 300/hr. My India-based Consultants were $20-30 / hr. That was the cost to the customer, and we obviously paid the Consultants less.

There's been case after case after case of this happening at large US (and multi-national) companies. Even Disney ran this play, this time using Cognizant over Infosys..but the game was the same..

https://www.dailymail.co.uk/news/ar...rs-replaced-Indian-staff-visas-suit-says.html

 

[MichealKnight]

It's a global, diverse world

Above is exactly what happens. They don't broadcast the events after the 12 months is up. Most employees lose their jobs, the costs go down and the quality goes down too, and the executives get a mega bonus for the cost savings to the bottom line...without regard to the impacts to their customers. It's sorry, but its pretty common among US executives to throw thousands of their fellow citizens out of work for a quick buck for themselves.

It's the way things should be, and are. This happens to manufacturing workers, entry level workers, tradesmen all the time.

And many - have no issue with it whatsoever.

Consistency is good, as is the global diverse marketplace. We're all one global family, and exchange of ideas, labor, and culture is great.

 

[Midpack]

It's the way things should be, and are. This happens to manufacturing workers, entry level workers, tradesmen all the time.

And many - have no issue with it whatsoever.

Consistency is good, as is the global diverse marketplace. We're all one global family, and exchange of ideas, labor, and culture is great.

+1. That’s the irony. We’re all for it (or stay conspicuously quiet/willfully ignorant) when it’s an industry we’re a consumer of, but it’s an outrage when it’s an industry that impacts us directly. I spent my career in manufacturing and when I see workers from other industries protesting and barking at everyone to protect their jobs/industry I think ‘but it was fine to those protestors when it was all those involved in manufacturing.’ We all had a choice, and made it...

 

[TechLead]

Hmmm..I've had the exact opposite experience, and I've worked for some of the largest Silicon Valley companies selling software and Professional Services to the largest of the Global 2000 firms.

https://www.dailymail.co.uk/news/ar...rs-replaced-Indian-staff-visas-suit-says.html

My experience is from working for 3 companies that you find in QQQ ETF holdings as upper 10 holdings. Few of the are actually today run by Indian born CEOs.

But clearly those companies import on H1B / hire from Grad Schools good people. Pretty much all of them have 1/2 foreign born employees.

They usually outsource grunt work to India, but even that is changing.

 

[24601NoMore]

It's the way things should be, and are. This happens to manufacturing workers, entry level workers, tradesmen all the time.

And many - have no issue with it whatsoever.

Consistency is good, as is the global diverse marketplace. We're all one global family, and exchange of ideas, labor, and culture is great.

And if a foreign worker were hired by your company to replace you at 20-25% of your salary, and you were to lose your job as a result (and be unlikely to find another job anywhere near your old salary because many other companies in your industry were doing the same)..would you still be OK with that?

Oh, and to add insult to injury..assume your current company told you that you were only eligible for unemployment and/or severance unless you trained your foreign worker..on how to replace you, at 20-25% of your original salary.

I'm guessing (just a hunch) that neither you nor any other American would TRULY be OK with that scenario.

 

[JoeWras]

I guess if you've been displaced, it's personal and leaves a mark.

Luckily, we are free to make our own decisions, including a preference to domestic labor. Consider the situation with PPE materials, and what that did for our initial virus response. (Hint: it was and still is catastrophic for North America.)

I don't think India bashing is helpful. I worked with some excellent engineers world over that I called friend and colleague.

What I didn't like about it was the difficulty of working on a 11 1/2 hr time shift. It was difficult for all of us and hurt the quality of our collective work. I especially didn't like the fact that my colleagues would typically work from 9pm to 1am for our benefit. It was clearly disruptive to their family life.

 

[TechLead]

And if a foreign worker were hired by your company to replace you at 20-25% of your salary, and you were to lose your job as a result (and be unlikely to find another job anywhere near your old salary because many other companies in your industry were doing the same)..would you still be OK with that?

I would not be OK with it and I would not like to work for such company. That to me is indication that company will not do well. I like to work in a place where RSUs are worth something. .

I can't tell if Vanguard is or is not such place.

 

[Aerides]

I actually worked directly with one of the Infosys locations listed (scottsdale) and have been to that office a few times. I had 5 of their onsite folks in my team, and a dozen offshore in india.

Pretty good bunch.

Outsourcing and offshoring has been part of the US economy in large part since the 90's. Nothing new here.

 

[sengsational]

I'm not sure it will make a difference when it comes to quality of service and whether jobs remain domestic, but Vanguard is not your typical corporation; as a true "mutual fund" they are unique because they don't have shareholders to answer to. The customers are the owners. Obviously mishandled outsourcing / offshoring happens all the time, and we all cringe thinking about having to deal with representatives that are improperly trained and/or improperly motivated, whether domestic or foreign. I personally trust Vanguard not to screw this up.

 

[Toocold]

No, it’s outsourcing, not offshoring, as the article clearly points out.

Having been involved in many of these, you highlight an onshore model and when there is attrition you back it up with an offshore model. You also hire H1 workers to start transferring to India. That's how you make the economics work for an outsourcing company.

https://en.wikipedia.org/wiki/Infosys#:~:text=Infosys had a total of,employees were based in India.

Infosys had a total of 243,454 employees at the end of December 2019, out of which 37.8% were women. Out of its total workforce, 229,658 are software professionals and remaining 13,796 work for support and sales. In 2016, 89% of its employees were based in India.

You can bet that the majority of the onshore employees are in sales and marketing, and not in production.

 

[target2019]

They may sell off the Bogle statue as part of the deal?

But seriously, I would look for another job. The writing is on the wall for those employees.

For investors, Vanguard has transitioned to something other than the company you first invested with.

 

[24601NoMore]

In 2016, 89% of its employees were based in India.

You can bet that the majority of the onshore employees are in sales and marketing, and not in production.

EXACTLY. The US-based workforce is largely sales and marketing in these companies (Infosys, Cognizant, TCS/TaTa). The model is always the same. Put some nice, usually young and attractive America folks in the sales roles to go sell to their (generally American) counterparts in management rolls within Global 2000 companies. Have the "workers" be in India - aside from a small number of foreign workers here in America that act as the interface back to India (or Russia, Pakistan, China, etc) - eg: a US-based Indian project manager.

This outsourcing/off-shoring of IT has been one of THE single biggest detriments to the American middle class and way of life that there is. I saw it start back even before 1990, but it's gotten considerably worse in recent years..

Unfortunately, from a pure ER/economic perspective, this model is a huge hit to American prosperity and our way of life. It's wiped out hundreds of thousands if not millions of good paying IT jobs (often with six figure plus annual salaries) that used to be held by our own citizens, and have put them (usually at 20% or less the cost) in India, Russia, Pakistan, China, etc. The big American companies love it from a P&L perspective, and managers / CIOs / VPs of IT that do this are usually lauded and showered with bonuses. But, boy, does it suck if you're one of the ones affected, because not only do you lose your job after the "transition" - you're often not going to find a comparable job because many of the other potential employers are doing the exact same thing..and to make matters worse, many American IT workers are over 50 when they get "transitioned" by some..ummm...coincidence. Yeah, that's it..PURE COINCIDENCE, I'm sure..which makes it even MORE impossible to find a comparable job.

Net net, the H1-B VISA is a HUGE detriment to American prosperity. Politicians often say it's in place because the companies "can't find American talent" which is of course TOTAL BS. I personally know dozens and dozens of highly talented IT folks who could step into any of these jobs in a heartbeat. The companies just don't want to pay fair wages for the skill, and would rather give the $$s to a foreign company instead at 20-25% pennies on the dollar. We really should just scrap the entire program.

 

[TechLead]

Net net, the H1-B VISA is a HUGE detriment to American prosperity. Politicians often say it's in place because the companies "can't find American talent" which is of course TOTAL BS. I personally know dozens and dozens of highly talented IT folks who could step into any of these jobs in a heartbeat. The companies just don't want to pay fair wages for the skill, and would rather give the $$s to a foreign company instead at 20-25% pennies on the dollar. We really should just scrap the entire program.

I recommend you to take a drive through Cupertino CA. Look at cost of houses on zillow. Then kindly observer that town is 90% Indian and Chinese.

Do you really think those people are making 25% less and live in multimillion dollar houses?

 

[Vincenzo Corleone]

For 12 months. And then... ?

A lot of us have seen this pattern before, have lived through this pattern. It rarely ends with all jobs staying in the USA. Or, the new jobs are formed in the offshore arm of the company.

I'm disappointed in Vanguard on this. I'm not pulling any money out yet, but no more new money is going in.

Yup. Same here. Disappointed. I'd transfer out my tax sheltered money, but where to? Everyone else is doing the same thing.