Socialist Worker

HSBC bank in the rush to the bottom

by Joseph Choonara
Issue No. 1874

BANKING giant HSBC has become the latest multinational to announce plans to move jobs overseas. Some 4,000 jobs will be axed from its call centres in Swansea, Birmingham, Brentwood and Sheffield, and transferred to call centres in India, China and Malaysia.

HSBC, the Hong Kong and Shanghai Banking Corporation, is the world's fourth largest bank and made $4.11 billion profits last year. Its chief executive, Bill Dalton believes that he can make even more. Announcing the job losses he said, 'HSBC has a responsibility to all its stakeholders to remain efficient and competitive. This includes increasing productivity and allocating resources to both developed and emerging markets.'

This is code for moving some jobs to areas of the world where wages are lower and forcing workers in the jobs that remain to work harder and faster. Some people say that we live in a global economy and that it is nationalistic to fight back when jobs move to the developing world. But this accepts the myth that moving jobs abroad will improve conditions in the developing world.

Corporations like HSBC, which is responsible for sucking large amounts of money out of the developing world in the form of Third World debt repayments, are not interested in the conditions for workers.

A worker in a call centre in Bombay, India, can expect to get 75p an hour to answer calls from Britain. And because of the time difference, workers in Asian call centres will have to work through the night.

The jobs in Asia will be no more secure than they are in Britain. If China becomes cheaper than India there is every chance that the jobs will be moved again.

Jobs in call centres are the easiest to move abroad, for example, to countries like India where lots of people speak English. The job losses at HSBC show the reality of the IT revolution which New Labour promised would provide jobs to replace those lost in manufacturing. In reality these are insecure, badly paid jobs.

Setting up call centres in the developing world has become a huge industry in its own right.

Some 154,000 Indians are employed in call centres answering calls for foreign companies. The multinationals can purchase reports that rank workers in different countries according to their level of education, 'cultural compatibility', English proficiency and 'cost advantage', in other words how little they can be employed for.

For example, one consultancy describes the 'cost advantage' of Chinese workers: 'Labour rates are very low and present a very attractive value proposition (think India ten years ago: low cost workers and lots of them).' The trend is of a rush to the bottom, forcing workers around the world to compete for ever lower wages and worse conditions.

One HSBC worker in Leeds told Socialist Worker, 'We had some of the Indian workers training with us in Leeds. Management had them reading the Sun and checking football results so that they will be able to make small talk with customers. We used to go out together and got on really well. Last week we were all told about the 4,000 job losses. Managers said these were changing times and they had to stay competitive. Nobody at work blamed the Indian workers-everyone blamed management. There are no jobs going in Leeds yet, but there is another centre doing the same work as us in Manchester. People are scared that one of them will be shut. Most people have the impression that call centre workers are part time or students. But many people have been working here for years. They won't be able to find new jobs easily.'

Other companies moving jobs to Asia include the insurer Aviva, British Telecommunications, Tesco and Abbey National. It is predicted that 200,000 call centre jobs could go by 2008.

That is why Blair was wrong when he promised that the expansion of the IT and communications sectors would replace jobs lost in manufacturing. And even in manufacturing, bosses use the threat of moving jobs abroad. Workers at Ethicon, a medical manufacturer, owned by healthcare multinational Johnson and Johnson, heard last May that plants in Edinburgh were due to close, with 850 jobs jeopardised.

Managers told them that they wanted to move the jobs abroad so that they could be done more cheaply and refused to negotiate with the TGWU union that represents the workers.

On Friday of last week the TGWU announced that 95 percent of workers had voted for strike action against the closure. It was also revealed last week that management at JCB, who produce mechanical diggers, have threatened their workers in Rochester, saying that they would move the plant to China if they took industrial action.

The threat followed a two-hour unofficial stoppage by workers over holiday rights. One worker rightly argued, 'The walkout was brought to a head over the issue of company holidays. It was nothing whatsoever to do with competition from places like China. The way they have linked the two comes across as another veiled threat.'

It was not clear as Socialist Worker went to press what action HSBC workers would take following the job losses. But an official for the Unifi financial workers' union said, 'The gloves are off. The world's local bank has shown that if the job can be done cheaper somewhere else then they'll move it. It's profit before people. We will fight tooth and nail to get the company to reconsider its actions.'

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