Boston, MA 08/12/2014 (wallstreetpr) – Diversified financial services provider Citigroup Inc (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM) are reportedly planning to expand their technology platform in Buenos Aires with a view to take advantage of the skilled professionals at a lower costs. Their move comes in the wake of Argentina being default only a few weeks back, Zacks equity research report indicated.
Buenos Aires
Argentina, which was the second biggest economy in Latin America, is filled with skilled labors such as engineers and programmers with the highest literacy rate in the region, but with the cheapest labor cost. It had the potential to become one of the hubs for the software technology companies if not today, but in the future.
The latest news of expanding the footprint in Buenos Aries is not without any basis. For instance, technology unit of Citigroup Inc (NYSE:C) in Argentina, which is called as ArgentinaDevelopmentCenter, was regarded as a key location for designing software for its businesses in Latin America. Currently, it had a workforce about 430 and was planning to increase by 20% by early next year.
The banks seem to prefer Argentina over Brazil and Chile because of labor costs despite the financial trouble.
JPMorgan
The financial services provider has also been reportedly adding workforce strength in its technology hub in Argentina at the cost of reducing jobs in Chicago, Tampa, New York, and Dubai in its support divisions faced with falling revenues there.
Similarly, another software company, Accenture plc (NYSE:CAN) has also been reportedly adding about 700 jobs in Argentina.
Software Exports
In 2013, Argentina had witnessed software exports of $900 million and this is set to record a minimum of 50% uptick to reach $1.4 billion in the current year. This growth potential in Argentina attracts big companies to scout for one more technology hub
Risks
Both Citigroup Inc (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM) might have to incur a loss in case the regulators in the U.S. preferred to downgrade Argentina. Citigroup had already warned of an $80 million loss in such an eventuality.
