Sallie Mae to Transfer 2,000 Overseas Jobs Back to U.S.
Tuesday, April 7, 2009
Sallie Mae yesterday announced plans to move 2,000 overseas jobs back to the United States from India and the Philippines, reversing a cost-savings measure the company took a year ago.
The jobs are projected to cost the Reston-based student lender about $35 million annually because of higher labor expenses. A few new jobs will be in the Washington area, where the company employs around 600, but most will be scattered across the United States.
"It's the right thing to do," said Sallie Mae chief executive Albert L. Lord. "The value of a company's franchise is essentially measured in financial terms, but there are a lot of values in a company that relate to the long-term value of a franchise. It's a wise investment in the company's future."
Lord said the company moved the jobs overseas about a year ago when the credit crisis was hurting Sallie Mae's bottom line. The company cut $300 million over the past 18 months, Lord said in an interview yesterday.
"It was a tough decision to move these jobs overseas," Lord said. "It was a lot easier to make the decision to bring them back."
Formally known as SLM Corp., Sallie Mae makes private student loans and ones backed by the federal government. The company then pools the loans into securities, which it sells to investors.
Sallie Mae manages $180 billion in education loans and has 10 million student and parent customers.
That model has come under pressure in recent months. First, the disarray in the credit markets has meant fewer investors are willing to buy the company's securities. Then, President Obama in February proposed an end to subsidies for student loan providers such as Sallie Mae and Citigroup, with the government becoming the sole provider of federally backed college lending. The proposal, which needs congressional approval, had an immediate impact on Wall Street. SLM stock fell 30 percent the day Obama announced his change.
Sallie Mae stock closed at $5.56 yesterday, up 21 cents, or 4 percent.
The company said it plans to fill jobs in the United States over the next 18 months. The jobs include positions in call centers, information technology and operations.
Sallie Mae employs more than 8,000 people across the country, including Florida, Indiana, Pennsylvania and Texas.
"It's a patriotic act," said Rep. Paul E. Kanjorski (D-Pa.), whose Wilkes-Barre district will receive 600 new Sallie Mae jobs, doubling the number of company employees at that location. "It sends a great message to corporate America to think as deeply as you can."
Kanjorski chairs a House Financial Services subcommittee that has jurisdiction over securities, exchanges and most insurance matters, except for health insurance.
Sallie Mae has been the biggest donor to Kanjorski's congressional campaigns, giving $86,000 over his career, according to the Center for Responsive Politics.