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Wall Street giants get swept away by brutal wave of Covid in India

(Bloomberg) – About 8,300 miles east of Wall Street, on a stretch of Bangalore’s Outer Ring Road, is what was once the heart of the global financial industry’s back office. Group of glass and steel towers housed thousands of employees from companies like Goldman Sachs Group Inc. and UBS Group AG who played critical roles in everything from risk management to customer service and compliance. Now the buildings are strangely empty. And with the number of cases skyrocketing in Bangalore and much of India, work-from-home arrangements that have supported Wall Street’s back-office operations for months are under intense pressure. An increasing number of employees are either sick or scrambling to find essential medical supplies such as oxygen for their relatives or friends. Standard Chartered Plc said last month that around 800 of its 20,000 employees in India were infected. As many as 25% of employees on some UBS teams are absent, said a company executive who spoke on condition of anonymity for fear of losing his job. At Wells Fargo & Co.’s offices in Bangalore and Hyderabad, work on co-branded cards, balance transfers and rewards programs is behind schedule, an executive said. The Covid crisis in India has revealed a little-discussed vulnerability for companies that have spent decades outsourcing functions in the country. The outbreak in India is escalating even as vaccinations fuel economic recovery in other parts of the world, heightening fears of a back office bottleneck at a time when Wall Street companies rarely have been busier. is a global crisis, “said DD Mishra, senior senior analyst at researcher Gartner Inc. The current wave will be” much larger “and organizations with staff based in India” will need to take action to plan and mitigate if necessary. ” , Mishra and his colleagues wrote in a note last week. Nasscom, the leading lobby group for India’s $ 194 billion outsourcing industry and its nearly 5 million employees, downplayed the threat to operations. But Mishra and his fellow analysts at Gartner say they are responding to a flood of calls daily from worried global customers to inquire about the Covid-19 situation. The total number of coronavirus infections in India has risen to nearly 23 million, of which about a third was added from the middle. April. The state of Karnataka, whose capital is Bangalore, has been hit hard. Experts have warned the crisis is likely to worsen in the coming weeks, with a pattern predicting up to 1,018,879 deaths by the end of the month. of July, that is to say a quadruple compared to the current one. official count of 249,992. A model prepared by government advisers suggests the wave could peak in the coming days, but the group’s projections changed and were wrong last month.In Bangalore, Delhi and Mumbai, the three main bases of operations of the financial giants, the Infection rates have reached such alarming levels that local governments have ordered strict restrictions on movement.Although the crisis has hit parts of the national economy by $ 2.9 trillion, the latest wave has notably affected the twenties of the population that dominates the outsourcing companies and is difficult to replace. Most of them are English speaking and technically skilled workers. Planning for Business Continuity For now, back office units either bring in part-time workers or ask employees to take on multiple roles and reassign staff to make up for those who are absent. They schedule overtime, postpone low-priority projects and conduct pandemic continuity planning exercises for several locations if the wave of the virus escalates. A Wells Fargo employee said some work is shifting to the Philippines , where staff work nights to catch up. The San Francisco-based bank employs approximately 35,000 people in India to help process auto, home and personal loans, perform collections, and assist customers who need to open, update or close their accounts. banking. “Almost all of Wells Fargo’s employees in India work remotely, and we are not experiencing a significant impact on our business operations,” spokeswoman Beth Richek said in an email response to questions. “We continue to support our employees and help local communities in India with over $ 3 million in grants.” She added that no work has been moved out of India and that there have been no delays in the work of the Indian team for A UBS employee said that in the absence of many of the bank’s 8,000 employees in Mumbai, Pune and Hyderabad, work is shipped to centers like Poland. The employees of the Swiss Bank in India take care of transaction settlement, transaction reporting, support to investment banks and wealth management. Many tasks require same-day or next-day turnaround times. A UBS representative did not respond to a request for comment. With uncertainty over when the Indian government will contain the crisis, an executive who asked not to be identified equated the situation to theft blind with no idea how many employees will be affected. Rebalancing the Loads “We are looking carefully at how we can rebalance the load,” Bill Winters, CEO of Standard Chartered, said in an earnings call last month, noting that some work had been routed to Kuala Lumpur, Tianjin and Warsaw. . “Either way, we think we are very well provided.” Jes Staley, CEO of Barclays Plc, said some functions have been transferred to the UK from India. Call volumes have increased and people are in distress, he said, adding that signs of pressure were to be watched. The bank has 20,000 employees in India. Last year, when a sudden lockdown ordered by Prime Minister Narendra Modi saw these banks scramble to maintain operations, the European Banking Authority said the surge in outsourcing of support functions “exposed these banks to operational risks. “After asking their employees to work from home en masse last year, most of them have continued to operate at work from home levels close to 100%. Natwest Group Plc’s workforce in Bangalore, Delhi and the southern city of Chennai – representing one-fifth of its global total – is fully set up to work from home. final business tasks such as risk modeling, accounting compliance, and building applications. A representative from the bank said workflows can be absorbed by the larger team if needed and that there has been no material impact so far. Citigroup Inc. said it hasn’t There was currently no significant disruption, while Deutsche Bank AG said employees were working seamlessly from their homes. Morgan Stanley and JPMorgan Chase & Co. detailed the relief efforts they are undertaking, but did not specify the impact on their operations. HSBC Holdings Plc CEO Noel Quinn said he was “watching closely” and ruled out any significant impact at this point. At a recent virtual meeting of Accenture Plc’s corporate strategy team, for example, the discussion was not about usual salary increases or promotions. Instead, worker after worker demanded flexibility, reduced workloads and non-meeting Fridays, one executive said, asking not to be appointed to discuss internal company matters. an obstacle, said one executive, but it is not clear where else to go. The safety of its employees is a top priority and the company is taking various measures to ensure their health and well-being, Accenture said in an emailed statement. It also has the ability to transfer work across its global network to continue to meet customer needs. “We tell customers that they need to relax service levels and lower expectations for the next few weeks,” said Mishra, the Gartner analyst. “This is not a normal situation.” (May 8 story update with Wells Fargo comment in 15th paragraph) For more articles like this please visit us at bloomberg.com Subscribe now to stay ahead with the source of most reliable business news. © 2021 Bloomberg LP


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