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Posted on 8-10-2004 Outsourcing Journalism Reuters is covering US corporate reporting from an office in Bangalore
Randeep Ramesh in Bangalore, October 7, 2004, The Guardian
Reuters, the financial news service, will today officially unveil an
office in south India that will see 20 journalists cover 2,000 small to
medium-sized American companies listed on the New York stock exchange.
The operation, based in Bangalore, has been running for six months with a
six-strong editorial team reporting on companies' earnings, press releases
and filings with the US Securities and Exchange Commission as well as
analysts' stock alerts.
This is just the beginning for Reuters in Bangalore. The company's data
unit, which archives material for 30,000 global firms, already employs 300
people and will grow by another 300 next year. The average age in the
office is 25.
In outsourcing journalism and data processing, Reuters has become the
first large media company to base US corporate reporting functions
offshore.
The job of financial news reporter is just the latest in a long line of
positions, ranging from call centre operator to legal researcher, which
have been sent abroad in recent years. Part of the reason is improved
global communications; the other is that work can be done more cheaply in
poorer countries.
Reuters admits costs are 60% less in Bangalore than its "onshore" centres
in New York, Britain and Singapore. But sensitive to the charge that it is
cutting back in the west only to hire abroad, managers deny that this is a
reason for coming to India.
"Bangalore has two main advantages. People here speak English and we have
a large, highly educated workforce, in terms of the number of MBAs and
finance degrees," says Marion Leslie, head of data operations, who moved
from the company's Devon office to Bangalore earlier this year. "It is
number-heavy work and you need people who can understand financial markets
and make them understandable."
The technology boom has connected Bangalore to the rest of the world far
more rapidly than in other developing countries. The result, say
journalists there, is that it is now possible to send information around
the world as easily as across a room.
In the far end of the Reuters office, situated on the fourth floor of a
glass and concrete tower in downtown Bangalore, Matthew Veedon motions to
a colleague about a story that needs writing and a deadline is looming.
"Prudential have put out an upgrade on the stock, and it's important that
we get the story first," says Mr Veedon, news editor in the Bangalore
bureau. Like most journalists, the 32-year-old wants to beat his
competitors in the news business. "We have American 24-hour news in our
office and there's a buzz filing a report and then to see the copy making
headlines on the television," he says.
In two shifts, starting at 3.30pm and ending at 4am the next day, Mr
Veedon's six-person team is part of an effort by the company to expand
coverage of small and mid-cap companies listed in New York.
"We can have a big effect. A couple of weeks ago we ran a story on a $60m
(£33.7m) merger between two tech companies based in Texas. Before we came
along nobody would notice. But our story pointed out the offer price of
the deal was 50% higher than the trading price. The result was the stock
shot up."
Mr Veedon says that Bangalore is not yet big enough to handle breaking
news. "Once the story requires interviewing a company director, or
analysts then the New York bureau takes over. We are just starting up
here."
Though Reuters, which has its headquarters in London, is perhaps best
known as an international news agency, the bulk of its revenue comes from
the 400,000 people in the City, on Wall Street and in other financial
centres who use its information products.
These rely on first extracting information and then manipulating it to
create the graphs and tables that are building blocks of the expensive
packages on the desks of corporate financiers.
Tracking the boardroom shuffles and share offers of thousands of companies
across the world is a labour-intensive affair. For Reuters, young workers
in south India appear willing and able to process large amounts of raw
data.
Take company appointments. In the Bangalore office, a team of seven
graduates work through the boardrooms of more than 200 companies a day
checking names, ages, departures and the salaries of top management.
"It's crucial we get this right. During the peak reporting season we each
handle 40 companies a day. After all we have customers paying for the
information and they need to know it's up to date and accurate," said
Anupam Singhi, team leader in the fundamentals section.
With low costs and numerate employees, Reuters has been able to bring a
factory-style approach to what appears to be white-collar work. Preetie
Bindra, 22, and her colleagues spend every day checking the earnings
estimates of 6,000 multinationals in Asia, America and Europe, including
1,200 in Britain.
"You soon get used to the format used by different analysts to present
information. The idea is to standardise the format so that anyone of us
can take the information and present the results in the same way."
Bangalore is already producing results, with its new package, Reuters
Knowledge, being sold to investment managers. The package allows a single
company's news to be tracked with each headline graded on whether it will
move the stock price. For Kath Loosemore, who worked on Knowledge, it is
proof that Bangalore "adds value".
"It is not about cutting costs, it is about creating new products."
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