U.S. companies move work onshore

By SiliconIndia   |   Tuesday, 30 June 2009, 03:38 Hrs   |    46 Comments
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U.S. companies move work onshore
Bangalore: In the U.S., top outsourcing customers such as Bank of America and several local governments are asking vendors such as TCS, Infosys and Wipro to deliver more projects locally. These outsourcing customers are also canceling job offers to foreign workers in an attempt to address anti offshoring sentiments and cope with legislative requirements of the Troubled Assets Relief Program (TARP).

In the last few months, at least five new outsourcing contracts had new clauses which mandated that certain work be delivered onshore, reports The Economic Times. Under this regulation, Bank of America and other financial services organizations who have received funds under TARP need to ensure that they try and employ local American workers before hiring a foreign workers.

"Bank of America's Merill Lynch integration projects are being delivered locally because of TARP requirements. On any other day, it would have asked Infosys or other companies to do," said a U.S. based person familiar with the bank's outsourcing initiatives.

A spokeswoman at Bank of America confirmed that her company had canceled around 50 H1B job offers in order to comply with TARP. Several graduates from the University of Michigan are among many potential H1B workers left stranded in the US.

"Recent changes in U.S. legislation made it necessary for Bank of America to rescind job offers it had made to students requiring H-1B sponsorship. Bank of America had very much looked forward to these individuals joining the company," said Kelly E Sapp, spokeswoman at Bank of America.

Experts such as Phil J Fersht, research director at Boston-headquartered AMR Research, say all TARP funded banks have canceled their H1B offers. "All TARP-funded banks are rescinding H1-B offers right now, except in critical roles and existing outsourcing deals where its imperative to have offshore managers onsite. It's a political 'hot potato' especially after the AIG bonus fiasco."

The TARP-funded banks are not the only ones demanding more local delivery. Several government customers including City of Tucson, which works with TCS and State of Missouri, which is a Wipro customer, have asked these vendors to move over 80 percent of work to the U.S., and create local jobs.

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