Bangalore boys beware! Those journos who took the first bus to Bangalore last year when Reuters set up its India centre in the southern city may be in for some heartburn, if their American colleagues have their way. A US arbitrator will soon hear the Newspaper Guild of New York's charge that offshoring US-based editorial jobs violates its contract with Reuters. The arbitrator's decision will be legally binding. The case could take months to complete.
Reuters journalists in US, represented by the Newspaper Guild of New York are waging a battle to keep their jobs and prevent the Reuters management from shifting jobs out of their country. The Guild claims that the Reuters management's move to shift editorial jobs out of US violates an agreement signed between them and the Reuters management six years back. The employees union claims that Reuters America LLC got several tax sops when it set up its swanky US headquarters in 2000. These sops, they claim, were given in exchange for an assurance that core Reuters editorial jobs will not be moved out of US. The Reuters management and the Guild are currently renegotiating the wage agreement.
Last year, Reuters set up its Indian outsourcing operations at Bangalore, hiring editorial and non-editorial jobs. Reuters is planning to jack up staff strength at its Bangalore centre to 1,200 to 1,500. The multinational-level salaries offered by Reuters saw several journalists quit their jobs, moving to Bangalore in 2004. However, these salaries are still lower than the compensation for those doing similar duties in the western operations of Reuters.
With advanced news and communication technology, much of corporate reporting and earnings analysis can be done offshore, which is why Reuters moved many of these jobs to low-wage countries.
Barry Lipton (Newspaper Guild president) says that what initially started as reporting of small-and-medium size companies is now changing to full-fledged reporting of all US business news. Though none of the US Reuters editorial jobs have been lost so far due to offshoring, Barry Lipton fears that such job losses are not far.
Reuters employees in US have planned a protest against its outsourcing plans on coming Thursday. Journalists and other non-journalist employees will picket Reuters' US headquarters in Times Square and other US bureaus at lunchtime to call attention to the dispute.
In fact, Reuters is not the first major MNC news service provider to set up India operations. In early 2000, Bridge News set up its India back office in Mumbai, and outsourced a lot of the editing work to India. However, the operations were wound up hardly a year later, when its US parent filed for Chapter 11 bankruptcy protection. A portion of Bridge News operations (basically non-news) was later taken over by Reuters. Other major MNC wire agency firms currently working in India include Dow Jones, (publishers of Wall Street Journal), Bloomberg and Associated Press. None of them have outsourced editorial work to India so far.
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