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Unexpected Consequences of Outsourcing: Local Jobs in Jeopardy

Strategic Insights

— 1 min read

As the trend of outsourcing domestic jobs to India continues, unexpected consequences are beginning to emerge. Reuters' decision to shift editorial jobs from expensive newsgathering locations to Bangalore, India, has led to the hiring of 40 Indian journalists to focus on small and medium-sized U.S. publicly traded firms. Meanwhile, local businesses in Colorado Springs are struggling to stay afloat, with Valero Energy selling off key assets just days after acquiring them, and Twin Peaks' independent movie house, Kimball's Twin Peak Theater, experiencing a 20% decline in ticket sales.

Key Takeaways:

  • Reuters' decision to outsource editorial jobs to Bangalore, India, has led to the hiring of 40 Indian journalists to focus on small and medium-sized U.S. publicly traded firms.
  • Valero Energy has sold off key assets, including a fuel terminal in Fountain and a pipeline to Casper, Wyoming, just days after acquiring them for $455 million.
  • The sale is expected to close in three months, leaving Valero Energy without control over a significant portion of the region's gasoline supply.
  • Kimball's Twin Peak Theater, an independent movie house in Colorado Springs, has seen a 20% decline in ticket sales due to the box office slump sweeping the mainstream movie industry.
  • The theater has been forced to cut shows and reduce staff from 25 to 16 employees in an effort to stay afloat.
  • Owner Kimball Bayles hopes to fill seats by showing mainstream films and adding a Tuesday show for parents and their small children.

Statistics:

  • 40: The number of Indian journalists hired by Reuters to focus on small and medium-sized U.S. publicly traded firms.
  • $455 million: The price paid by Pacific Energy Partners LP for the 550-mile pipeline and terminals acquired from Valero Energy.
  • 20%: The decline in ticket sales at Kimball's Twin Peak Theater since last year.
  • 25: The number of employees at Kimball's Twin Peak Theater at the beginning of the year, reduced to 16 due to financial difficulties.
  • 3 months: The estimated time for the sale of the fuel terminal and pipeline to close.

Sources:

  • Reuters' India Bureau
  • Valero Energy
  • Pacific Energy Partners LP
  • Kimball's Twin Peak Theater
  • Paul Beebe
  • Wayne Heilman
  • Jacob Luecke

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