As It Tries to Cut Costs, Wall Street Looks to India

In the latest development of the trend towards outsourcing US jobs to India, some Wall Street financial houses are looking to hire India-based researchers. J. P. Morgan, Lehman Bros., and Morgan Stanley are among the latest US investment firms to seek cheaper, well-educated labor in India. Merrill Lynch already has a technology center in the country, and Goldman Sachs has similar plans to develop a 250-employee Indian unit, although neither has researchers at work there at present. "The downturn in the capital markets has collided with cutthroat competition among Wall Street firms to create pressure on costs," said the research director at Deloitte Consulting in London. But although the drive to cut costs has made India more appealing for a variety of jobs – notably including customer service call centers – there are concerns about the validity of reports developed by researchers based outside the US. "An analyst sitting in Bombay will find it very difficult to do a competent job writing a report that values Wal-Mart's stock if he has never even been to Wal-Mart and doesn't have a close relationship with Wal-Mart's management," said one senior analyst at a Massachusetts-based financial services group. Despite this and other challenges, another consultant estimates the number of research jobs going to India by 2008 to be in the thousands, not the hundreds. – YaleGlobal