Sallie Mae Cancels India Outsourcing Plans

Virginia-based Sallie Mae, America's biggest student loan provider will shift around 2,000 positions from its offshore facilities in India to US cities including Newark in New Jersey, the company announced on Monday.

Through its subsidiaries, Sallie Mae manages $180 billion in education loans and serves 10 million student and parent customers. The company's centers in Pune, Bangalore and Philippines offer loan origination, servicing and collection services.

"For 37 years, we have been dedicated to helping America's students enhance their lives through an investment in higher education," said Albert L. Lord, chief executive of Sallie Mae. "The current economic environment has caused our communities to struggle with job losses. They need jobs, and we will put 2,000 of them into U.S. facilities as soon as we possibly can." Sallie Mae expects to hire these employees over the next 18 months.

According to the US department of labor, the unemployment rate during December 2008 rose from around 6.8-7.2% with almost 2 million workers losing their jobs between September and December.

Some American outsourcing firms are trying to woo back customers already offshoring to low-cost destinations such as India.

Smaller US firms such as Rural America Onshore Sourcing and Xpanxion are attempting to build a sustainable rural outsourcing model in the US at a time when offshore locations such as India are facing a backlash and unemployment rates have touched an all-time high.

Xpanxion, an Atlanta-headquartered software firm, which shifted its software testing work from Pune to Nebraska a few years ago is among a handful of such firms seeking to create a more comfortable and cost-effective alternative to offshore outsourcing.

Customers such as NCR, Coca Cola and Goldleaf Financial Solutions are outsourcing software projects to Xpanxion.

At a time when political lobbyists such as Senator Chuck Grassley are leading a campaign against offshore outsourcing by American firms, some customers might prefer to outsource smaller projects to local providers and avoid being seen as supporting the outsourcing of US jobs.

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