JOBS

Waste Management to outsource Arizona jobs to India

Some employees relocated to Arizona less than two years ago, but the company will offer retention bonuses for those who remain until layoffs take effect.

Dennis Wagner
The Republic | azcentral.com
Waste Management Inc. confirmed this week that about 120 Arizona employees are being laid off in the coming months because their billing duties are being shifted to Asia.
  • About 120 Arizona employees are being laid off in the coming months by Waste Management Inc.
  • The billing duties handled by Arizona workers are being transferred to Indore, India
  • The company is sending the jobs offshore to lower its labor costs

The central Indian metropolis of Indore, where slum dwellers report incomes of about $78 per month and a carton of eggs costs 88 cents, is about to get some new jobs thanks to outsourcing from Phoenix.

Waste Management Inc. confirmed this week that about 120 Arizona employees are being laid off in the coming months because their billing duties are being shifted to Asia.

The move could reduce company labor costs for those positions by three-quarters.

In a written statement, Waste Management of Arizona said sending jobs offshore "is about optimizing our back office processing functions" such as data entry and billing.

Company spokeswoman Janette Micelli said in an email that Waste Management has 2,000 Arizona employees, so the transfer of 120 jobs amounts to about 6 percent of the labor force.

"These are always difficult decisions, and we're doing what we can to encourage affected employees to apply for other available positions within the company," Micelli added in her message.

RELATED: Will your job disappear?

RELATED: Reshoring trend of moving operations back to U.S. gains steam

Internal communications to employees at Waste Management's Consolidated Billing Center in Phoenix, obtained by The Arizona Republic, indicate the move is to begin this month. Those emails stress that workers can earn retention bonuses if they remain on the job until they are laid off. The bonuses — from $2,000 to $8,000 — are in addition to severance pay. One email notes that layoffs are "hard for everyone," and "at the Senior Leadership level we are committed to treating everyone as fairly as possible."

"This type of Business Process Offshoring/Outsourcing ("BPO") is common amongst S&P 500 companies," the email continues, and results in "a lower cost (for labor) with demonstrably improved efficiency and better quality. The average cost of a transactional processor in the U.S. is (about) $45K whereas the cost of that same resource in our India service center is (about) $10K."

The billing center at Interstate 17 and Bell Road was consolidated about 18 months ago for Waste Management's nationwide operations, and scores of employees were relocated to Phoenix at the time. Now, some of those workers face termination.

An economic development spokeswoman for Phoenix did not respond to a request for comment on Waste Management's employee shift, or on the impact that job offshoring has on the city.

RELATED: Arizona job market kept growing in March

As of 2014, U.S. companies employed an estimated 14 million workers overseas, with about 2.4 million jobs annually being transferred to India, China and other nations. A recent study by professors at MIT and Berkeley concluded that nearly one quarter of all U.S. companies have employees overseas, especially among large business.

Economists and political activists have for years disputed the consequences of outsourcing. Proponents say the practice assists the poor in foreign nations, reduces labor costs for U.S. companies, lowers product prices for consumers and opens international markets so American businesses can expand. Opponents say the job losses fatten corporate profits while hurting American workers and sustaining unethical, exploitative and environmentally unsafe employment practices overseas. They also say outsourcing perpetuates poverty at home and abroad while undermining the U.S. economy.

Waste Management's annual revenue in 2015 totaled $13 billion, down from $14 billion in 2013. The company, based in Houston, is the largest of its kind in North America and includes services related to landfills, environment and energy.

Waste Management's most recent filing with the Securities and Exchange Commission says the company has roughly 40,600 employees worldwide, down from 42,700 two years ago. Waste Management of Arizona serves about 500,000 customers statewide.

Arizona companies hiring 100 or more in April