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Conseco to cut jobs, moving work to India

Conseco Inc, a struggling life-insurance and loan company, is expected to reduce its work force in coming months and move about 14 per cent of its US jobs to India in a bid to cut $100 million in costs, according to a report on Friday.

Company officials were not immediately available to comment on the report, which appeared in the online version of the Indianapolis Star on Friday.

The newspaper said Conseco plans to eliminate 1,000 jobs, or about 7 per cent, of its US work force as it moves to streamline operations.

Citing a memo from Conseco chief executive Gary Wendt, the paper said 800 to 1,000 jobs will disappear over the next 21 months from the company's hometown operations in Carmel, Ind., where Conseco employs 3,300 people.

All told, about 2,000 jobs, or 14 per cent of Conseco's nationwide work force of 14,300 are expected to move to India by the end of 2002, the paper said.

Labor in India is far cheaper than in the United States.

The company was reported as saying that the average pay of US employees whose jobs are slated to move to India is $32,000 per year. Transferring the work to India will save about $30 million to $60 million, the company was reported as saying.

While Conseco has trimmed jobs in the past year and spoken openly about the need to be more productive and efficient, Thursday's memo was the first time the company had put hard numbers to its planned reductions, according to the report.

As part of an ongoing effort to boost productivity, "we now have a clearer idea of the impact on our work force," Wendt was quoted as saying in the memo. "Over the next two years, we will be moving a number of functions to India and other outsourcing vendors."

Conseco cut 2,000 jobs at its Minnesota-based finance unit last year and now is looking harder at finding efficiencies in insurance operations centered in the Indianapolis area, the paper said.

Conseco shares were up 10 cents at $16.96 in early afternoon New York Stock Exchange trade, not far from a 52-week high of $18.60. The stock traded around $50 a little more than two years ago, but has been dragged down by a host of problems from its acquisition of loan firm Green Tree Financial for $6 billion in 1998.

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