Prudential outsourcing NEPA jobs [The Times-Tribune, Scranton, Pa.]

July 20--Internal documents from Prudential Financial show the company is outsourcing work at its Scranton facility to a Florida company with ties to India, and leaving the door open for more to follow.

A two-page Prudential Retirement document titled "Moving Portions of DB Operations Functions" obtained by The Times-Tribune lays out the company's plan to move work associated with about 30 jobs in Scranton and about 30 jobs in Hartford, Conn., to a Florida-based third-party administrator, CHCS Services. The move would eliminate 60 positions in Scranton and Hartford in phases by the end of 2010.

Based in Pensacola, Fla., CHCS Services focuses on health and life benefits administration. In April, it was purchased by Patni Computer Systems, headquartered in Mumbai, India.

The document, addressed to "Client-Facing Teams" and marked "Not for Distribution. Confidential" outlines how Prudential executives should make a business case for the decision, citing Prudential's broad goal of providing cost-effective services to clients and meeting its obligation to shareholders and investors.

Prudential spokeswoman Dawn Kelly confirmed the authenticity of the document and said nothing in them contradicts what the company told employees or the press previously. "Our initial statement clearly says we were outsourcing," Ms. Kelly said.

Even more ominous for Prudential's 850 local employees is the suggestion in the memo that more jobs may be outsourced in the future.

"It is possible that we may decide to use external vendors in other areas where it might make sense in the future. ... We must remain flexible and make changes to remain viable in the dynamic retirement marketplace," the June 23 memo states.

U.S. Rep. Paul E. Kanjorksi, D-Nanticoke, meanwhile, has a meeting scheduled with Prudential officials Thursday to discuss the job cuts. He recently expressed his "deep frustrations and disappointment" with the company. A spokesman for Mr. Kanjorski said the congressman would wait until after Thursday's meeting to comment.

The memos make it clear some employees would not be subject to this round of outsourcing. Those who work directly with clients and participants, including those who handle inbound calls, are being spared. Also, employees who work with specific union and government pensions are not losing their jobs in this round of cuts.

The Western Council of Teamsters, United Technology Corp. pension, union plans known as "Taft-Hartley Plans," and the National Integrated Group Pension Plans will all continue to be handled by Prudential employees and Prudential hardware in the United States.

Some employees will be temporarily relocated to CHCS in Florida to ensure continuity of service, the document said. Another memo titled, "Talking Pts for Client-Facing & Media Relations Teams," said the "operations work will be supported primarily by Patni's India location."

Mr. Kanjorski's bid to save local jobs comes just as Prudential's employment level at its similar facility in Hartford comes under scrutiny, at risk of running afoul of a state loan and tax abatement package it received in 2008, according to reports by the Hartford Courant. Prudential received a $4.6 million, 10-year state loan and a $900,000 exemption from state taxes in exchange for ramping that facility up to 988 employees before 2013. The planned shift of work to Patni drives employment there to less than 800.

James Friedman, an equities analyst who follows information technology businesses for Susquehanna Financial Group, said while Patni is often associated with India, it has facilities in the U.S. and its stock is traded on the New York Stock Exchange. The company's founders are originally from India, launching the company after graduating from the Massachusetts Institute of Technology.

The company's main business is information technology outsourcing and insurance claims processing, Mr. Friedman said.

"So rather than a company buying, let's say, new software and deploying it, it would hire someone such as Patni to manage it and integrate it from abroad," Mr. Friedman said.

In 2009, Patni reported $656 million in revenue and $116 million in profit.

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