These outsourced Vanguard workers are getting their jobs back

When Vanguard Group outsourced more than 1,300 retirement-plan office jobs to Infosys in 2020, both companies pitched the deal as a win for the Philadelphia region, not just another cost-cutting move.

India-based Infosys called it a first step in attracting work from other U.S. financial employers.

But with Infosys moving jobs back to Vanguard and the Trump administration discouraging visas for foreign workers at U.S. contractors, that deal now looks as though it may have been a high point, not a sign of bigger things ahead.

Vanguard spokespeople in 2020 stressed that Infosys planned to use the outsourced workers to open a “Mid-Atlantic Center of Excellence” facility in Malvern.

Infosys officials said they hoped to hire more U.S. workers to outsource work from financial companies into the center under a veteran Vanguard manager, Martha King.

It was “the largest-ever deal signed in Infosys history,” Pravin Rao, chief information officer, told investors in a conference call the day after the deal.

The stock jumped 15% on the news. Infosys president Mohit Joshi promised to improve retirees’ investment experience and set a higher service standard.

But the expected new business didn’t materialize. Infosys’ growth slowed after 2020. The company’s stock is now worth less than when it signed the Vanguard deal, and its major U.S. office centers are elsewhere.

The Vanguard arrangement itself has partly unraveled. Infosys “is in the process of transitioning services back to Vanguard,” according to a report an Infosys official in Atlanta sent to the Pennsylvania Department of Labor and Industry on Jan. 27.

As a result, 248 remaining Infosys employees who work on Vanguard projects are being laid off this spring and summer. That includes 70 record-keeping account administrators, 32 project managers, and others in smaller categories.

All but 10 will be offered jobs at Vanguard, according to the note, which referred state officials with any questions to a manager at Infosys’ Business Process Management (BPM) group in India.

That Infosys BPM outsourcing unit, initially financed by New York-based Citibank, had grown through the 2000s and 2010s by acquiring other outsourcing firms in the United States, Europe and Australia, adding business even as the backlash against outsourcing U.S. jobs grew.

The outsourcers tended to have lower pay. Vanguard employees who made the switch to Infosys got reduced benefits. New hires were paid lower rates than Vanguard veterans, according to former Vanguard and Infosys employees.

President Donald Trump has said he will curtail H-1B visas for foreign workers who come in the U.S. to work for outsourcing companies and other contractors and added $100,000 yearly application fees, though these have not been applied to all H-1B employers.

H-1B remains an important source of technology workers for U.S. government contractors and for state government contractors in Pennsylvania,New Jersey, and other states.

Two people familiar with Vanguard operations says it will continue to have some work done by Infosys and other tech outsourcing contractors.

Vanguard and Infosys declined to answer questions about what work Infosys will continue to perform for Vanguard.

Vanguard offered a general statement: “We’re proud to attract top talent to deliver the best possible outcomes for our clients. We also value our relationships with outside specialists who bring unique skillsets and the flexibility to allow us to deliver for our clients.”

A check of U.S. H-1B visa records shows Infosys relied less on foreign workers for its U.S. operations since signing the 2020 Vanguard deal — whether because it hired more Americans as promised or also because of a slowdown in new business.

The total of Infosys H-1B visa holders in the U.S. peaked at around 21,000 in 2019, the year before the Vanguard deal, falling steadily to around 5,800 last year. The number of Infosys visa holders in Malvern dropped even more steeply over that period, the records show.

But during the same period, Vanguard’s own use of H-1B visas for company employees increased, from an average of under 100 a year from 2020 to 2023, to more than 200 in each of the last two years.

The visa holders include Vanguard’s $625,000-a-year-salary head of investor advice and wealth management, a post occupied by Canada native Johana Rotenberg, and its $300,000-a-year head of fraud strategy, now occupied by a banking-industry veteran, Pooja M, from India. Veteran Vanguard managers receive most of their pay as fund bonuses.

Most of the Vanguard H-1B visa workers were paid between $100,000 and $200,000 a year. Roughly half of the Infosys visa workers were paid $100,000 a year or less.

Inquirer staff writer Joe Yerardi contributed to this artlcle.