Over the past decade, Business Process Outsourcing (BPO) has become a regular business phenomenon resulting from a new business strategy in the banking sector across the globe. Banks are outsourcing more and more tasks to third parties and relying more on suppliers, now more than ever. (Deloitte, 2012) The Swiss bank UBS is no exception. Since UBS created the UBS India Service Center in Hyderabad in 2006, parts of its back-office and middle-office functions have been outsourced to lower-cost locations such as India, China, the Philippines and Poland in the years since. The latest news says UBS will begin outsourcing its fixed income trading platform to two technology groups in a bid to save costs. (Reuters, 2014) However, coinciding with the rapid growth of the outsourcing trend, UBS has announced plans to close its fixed income business and lay off 10,000 bankers by 2015. The job cuts represent approximately 15% of the group's current 64,000 employees. (CNBC News, 2012). When companies outsource a job, they typically eliminate the department that performed it. While offshore outsourcing certainly has more than two problems and management skills are needed to overcome them, this report will look at the case of UBS investment bank operations outsourcing and discuss two challenges for management: UBS employees are facing an uncertain future and loss of motivation; Offshore partners have different organizational or national cultures, and the difference can lead to decreased productivity. These are mainly two problems in the implementation phase of outsourcing. Outsourcing is defined as the use of a third party by a regulated entity (an affiliated entity within a corporate group or an entity external to… middle of paper). ..... result of the operation In the case of team A, English is not the first language in China and it is unrealistic to expect offshore workers to have the same level of understanding after the same period of time verbal or non-verbal. verbal communication as a native speaker. Therefore, it may take longer to complete the knowledge transfer and get clear feedback. Different ways of interpreting something can even cause misunderstandings and have a negative impact on UBS's operational risk. Not just different countries, offshore teams. work for a different company. In fact, outsourcing is a business relationship between two separate entities. The two entities have values, visions, ways in which people interact and ways in which business is done. Just like cultural differences, organizational differences impact quality. of outsourced work. Despite the cultural clashes