Outsourcing bank jobs is common practice, say employees

Current and former Canadian bank employees have inundated CBC News with emails, saying outsourcing practices are common among the big banks after a CBC exclusive revealed RBC is using foreign workers to replace dozens of Canadians.

CIBC, TD, Scotiabank and BMO replaced Canadians with temporary foreign workers, claim hundreds of emails

Temp workers program questioned

10 years ago
Duration 2:52
The federal temporary foreign workers program has been called into question after employees at Canada's largest bank say foreign workers are costing them their jobs

Current and former Canadian bank employees have inundated CBC News with emails, saying outsourcing practices are common among the big banks after a CBC exclusive revealed RBC is using foreign workers to replace dozens of Canadians.

A CBC Go Public investigation revealed RBC is replacing 45 employees with temporary foreign workers at the end of the month. iGATE Corporation, a multinational outsourcing firm from India, employs the foreign workers.

It is against federal rules to fly in temporary foreign workers if their presence will force Canadian citizens into unemployment.

RBC CEO Gord Nixon denied the scheme on Monday, saying only one temporary foreign worker is involved and the bank is providing jobs to any Canadians impacted by the shift.

RBC's numbers questioned

CBC News received a flood of emails following the investigation, with more than 700 emails, including dozens submitted by bank insiders. Some of these notes suggest Nixon's numbers may be inaccurate.

One person referred to the alleged 45 jobs lost by Canadians as "a drop in the bucket." Since 2005, the writer claimed RBC has successfully outsourced hundreds of information technology and finance operations jobs through iGATE, TATA Consultancy Services, IBM India and Infosys, resulting in "many layoffs."

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RBC and iGATE have been working closely since 2005. RBC's contract with iGATE accounted for 11 per cent of the company's total revenue last year, according to the firm's annual report, with RBC paying iGATE about $100 million.

Human Resources and Skills Development Canada documents obtained through freedom of information requests revealed iGATE brought 138 temporary foreign workers to Canada in 2011 and is the 62nd largest company bringing such employees to Canada.

A person identifying themselves as an RBC employee, who claims his or her job is not at risk, wrote in about one of the bank's unofficial policies. The so-called 50-40-10 policy requires half of RBC's employees to be full-time, 40 per cent vendors and 10 per cent contractors.

Vendors typically come from iGATE, but the writer also mentioned TATA and IBM India.

A former RBC employee wrote about similar policy concerns, saying RBC held a team meeting for this employee and co-workers informing them of a 30-70 push, where their team would be rearranged to have 30 per cent full-time RBC employees and 70 per cent iGATE foreign workers.

Another ex-RBC worker, laid off in 2012 to make room for a foreign employee, emailed to say there was no opportunity to find a new, internal position after being informed of the layoff. "This is not just about 45 people being let go," the commenter wrote. "I would say that number is in the hundreds and counting."

Spotlight turned on other banks

Many others wrote in to say that RBC is far from the only bank implementing such practices. They told CBC News TD Canada Trust, the Bank of Nova Scotia and BMO Financial Group employ foreign workers to replace Canadian citizens.

"Unfortunately, Scotiabank is a much larger culprit," wrote one person, implicating consulting company Mahindra Satyam for having worked with the bank for more than five years. The individual wrote that Scotiabank replaced about one hundred positions based in Scarborough, Ont. — a number cited by another writer in a different email — years ago, and continued to promote the practice. The email cited an unofficial company policy to only hire IT workers from Mahindra Satyam.

Brian Porter, Scotiabank's president, said Monday night he does not plan to contract out positions held by Canadian employees. "It is not and has not been our practice to replace permanent positions with offshore workers," read an email from Scotiabank. "We currently contract out some IT services to augment project work."

One recently dismissed BMO employee wrote to say that "cuts are being done in waves as to not alert the media and tarnish the public perception of the bank." This worker claims he or she was given a severance package last week and will be replaced by a foreign worker.

CBC News received an email that appears to be sent from an anonymous BMO insider that had been sent to all BMO employees in Dec. 2011. The email says BMO "has made it clear that the number of Canadian full time employees will be limited and more than likely will be replaced by so-called GRs (Global Resources), low cost offshore and potentially onshore contractors from India, specifically from [TATA]."

BMO did not respond to requests for comment, but said the bank is working on providing an answer.

Another source, who claims to have worked at TD for more than 15 years, wrote in to say the company recently announced the employee's position redundant. In order to receive a severance package, the employee claims he or she had to spend four months training the people the company hired to fill the so-called redundant position. "This has been happening for months at TD," the email read, adding the company is in a trial phase for such shifts.

Another former TD employee, who was informed of being laid off last October, wrote that the bank laid off hundreds of its Canadian IT workers "in favour of foreign counterparts." The laid off workers received "a meager severance package and no assistance ... for getting internal placements" on their last day of work in February. The writer alleges TD announced that same month another 100 IT employees would be replaced.

TD did not provide comment, but called CBC News to say the bank is working on providing an answer.

Last year, 41 CIBC employees lost their jobs in a fashion similar to the situation unfolding at RBC, wrote a former CIBC worker. The person claims CIBC gave the laid off workers little support in finding new internal positions.

CIBC did not respond to a request for comment left by voicemail.