It's been less than two months since fellow Fool Dave Marino-Nachison first reported on British news giant Reuters'
What's surprising about the Reuters story, though, is just how vast an operation it is becoming, and how quickly. Right now, most of Reuters' Indian employees are doing data processing work, but about 20 are journalists. Editorially speaking, the Bangalore office of Reuters currently concentrates on providing basic information on companies -- for example, reports on debt and equity issuances. Reuters intends to increase its staff in Bangalore to about 400 by the end of 2004 -- then continue ramping it up all the way through 2006, by which time the company wants to have 1,500 employees working in India. That would be about 50% of Reuters' data processing jobs and fully 10% of its total head count worldwide.
All of this is part of the company's master plan to cut its operating costs by $780 million by the end of 2006. Reuters estimates that operations in Bangalore cost approximately 40% of the expense of getting similar work done in New York or London. Between the savings to be reaped and the kind of work being delegated to India, this move makes a lot of sense for Reuters. It's also part of a trend among data providers to move essential, but low-value-added, work offshore. Thomson
Much of the work done by data providers such as Thomson and Reuters, or MarketWatch.com
Fearless of the flames, Foolish writers dauntlessly carry on the offshoring/outsourcing debate in the following articles:
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- Thoughts on Offshoring and Outsourcing
Fool contributor Rich Smith owns no shares in any company mentioned in this article.