About 8,300 miles east of Wall Street, along the outer ring road in Bangalore, lies what was once the heart of the global financial industry's back office. Before the pandemic, this cluster of glass and steel towers housed thousands of employees from firms like Goldman Sachs and UBS, who played crucial roles in everything from risk management to customer service and compliance. However, these buildings are now eerily empty, as the rise in infections across Bangalore and much of India puts severe pressure on the work-from-home arrangements that have sustained Wall Street's back office operations for months. An increasing number of employees are either ill or scrambling to find essential medical supplies like oxygen for relatives or friends. Last month, Standard Chartered reported that about 800 of its 20,000 employees in India contracted the virus. Meanwhile, an executive at UBS, speaking on condition of anonymity, said up to 25% of staff in some teams are absent, while an executive at Wells Fargo’s offices in Bangalore and Hyderabad noted delays in work on co-branded cards, transfers, and rewards programs.
**Additional Measures**
While the banks have so far avoided major disruptions by shifting tasks to other outsourcing hubs, the Indian COVID crisis has exposed vulnerabilities that companies that have offshored tasks to India for decades rarely face. The outbreak is worsening in India, even as vaccines are fueling economic recovery in other parts of the world, raising concerns about the choking of back offices at a time when Wall Street firms are rarely busier. DD Mishra, a senior analyst at Gartner Research, stated that the current wave will be "much larger," and organizations employing staff in India "will need to take action to plan and mitigate if necessary," according to a memo written by Mishra and his colleagues. Conversely, NASSCOM, considered the main lobbying group in the $194 billion Indian outsourcing industry with 5 million employees, downplayed the threat to operations. However, Mishra and his fellow analysts at Gartner report receiving a daily flood of calls from global clients anxious about the "COVID-19" situation in India.
The total number of COVID infections in India has surged to nearly 23 million, with about a third of those cases added since mid-April. Karnataka state and its capital, Bangalore, have been particularly hard hit. Experts have warned that the crisis could worsen in the upcoming weeks, with one model predicting nearly 1,018,879 deaths by the end of July, nearly four times the official current count of 249,992. A model prepared by government advisors indicates that the wave could peak in the coming days, but the group's predictions have changed and were incorrect last month. In Bangalore, Delhi, and Mumbai, which are considered the three main centers for giant financial operations, infection rates have reached alarming levels, prompting local governments to impose strict movement restrictions. While the crisis has affected sectors of the $2.9 trillion state economy, this latest wave has notably impacted the population in their twenties, a demographic that dominates outsourcing firms and is difficult to replace, as most are English-speaking, skilled workers.
**Plans to Continue**
Currently, back office units are mobilizing part-time workers, asking staff to take on multiple roles, and reassigning employees to cover for absenteeism. They are scheduling overtime, delaying lower-priority projects, and conducting planning exercises to ensure continuity in multiple locations should the virus surge again. An employee at Wells Fargo noted that some work is being transferred to the Philippines, where staff are working night shifts to avoid a backlog. The San Francisco-based bank employs about 35,000 workers in India to help with processing auto, home, and personal loans, conducting collections, and assisting clients with opening, updating, or closing bank accounts. A spokesperson for the company, Beth Ritchie, replied via email to inquiries: "Almost all of our employees at Wells Fargo in India are working remotely, and we are not seeing significant impacts on our business operations. We continue to support our employees and assist local communities in India with donations exceeding $3 million," adding that no work has been moved from India and there have been no delays in the work of the India team supporting Wells Fargo’s credit card business.
On the other hand, an employee at UBS mentioned that with many of the bank’s 8,000 employees in Mumbai, Pune, and Hyderabad absent, work is being redirected to centers like Poland. The Swiss bank's employees in India handle trade settlements, transaction reporting, investment banking services support, and wealth management. However, many of these tasks must be completed the same day or the following day. A representative from UBS did not respond to a request for comment. Amid the uncertainty surrounding when the Indian government will contain the crisis, one executive, who requested anonymity, described the situation as "blindness," due to the lack of clarity on how many employees will be affected from week to week.
