Bank of America (BoA) is to set up an Indian subsidiary in April next year, enabling it to cut costs by moving more jobs offshore, according to a report by Reuters.
The move will result in job losses from BoA's global operations. Newswire reports suggest that jobs at the bank's UK operations in London are at risk, although BoA says it has not yet decided which functions will be moved to India.
Reuters quotes BoA spokeswoman Elisabeth Woods who says: "India was chosen because it is a leader in information technology and processing, and has a large English speaking workforce and good infrastructure."
She adds: ""It will help provide faster high quality, less expensive solutions to our customers."
Woods also says the bank chose to form a subsidiary rather than outsource work to other firms because it offers greater protection of its intellectual property.
Other banks including Abbey, Lloyds TSB and JP Morgan Chase have also recently announced plans to outsource jobs to countries like India. Research from Deloitte & Touche predicts that two million jobs will be outsourced from the West to India by 2008 due to labour cost savings of up to 40%.