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May 23, 2003

US, Australian states to pay cos. to keep jobs local

eFunds to open center in New Jersey, shift jobs from Mumbai

Financial services-focussed BPO firm eFunds Corp. is to shift call center jobs from its Mumbai office back to the US. In response to criticism from local politicians, the New Jersey state government has asked eFunds to open a new center in the state to provide support services for its unemployment welfare program. The state government will now pay eFunds 20% more for the outsourced services than envisaged in the original contract.

eFunds' new center at Camden, New Jersey is expected to employ about 10 workers earning $10-12 an hour as against the $2-3 earned by its agents in Mumbai, reports To compensate for the increased cost of operations, the New Jersey government will pay eFunds $73,800 a month over and above the current monthly payment of $340,000.

Under its original contract beginning in February 2002, eFunds was redirecting toll free calls from New Jersey residents seeking information about electronic welfare or food stamp programs to its contact center in Mumbai. Upon reading local media reports about the contract, New Jersey state senator Shirley Turner had proposed a bill banning outsourcing of state government work to overseas locations. The bill had inspired similar legislation moves in other US states as well.

For more information:

New Jersey decides to move call center from Mumbai to Camden

New Jersey is microcosm of protectionism debate
IDG News Service

Australian state might subsidize Telstra for not outsourcing

Prompted by a strident campaign in a local newspaper, Australia's Victoria state is offering to subsidize the country's largest telecom company, Telstra, to employ local IT workers rather than outsource work to Indian companies. Steve Bracks, Premier of Victoria, has said the State Government is willing to offer the subsidy since it would have "long-term benefits (for) employment in Victoria".

Victorian newspaper, Herald Sun, published a series of reports last week "revealing" how Telstra was using about 100 Indian IT workers from Infosys Technologies and Satyam Computers "on sweatshop wages" of $820 per month (as against Australian IT workers who would earn about $5000 a month). "The telco giant-- which is on track to report a $3.66 billion profit this year--would save $15-$18 million on the deal," the paper reported quoting an internal Telstra memo.

For more information:

Telstra worker tells of pay woe
Herald Sun

Telstra, Indian companies deny 'sweatshop' claims
The Sydney Morning Herald