Posted on 12/30/2003 12:07:17 AM PST by ETERNAL WARMING
More stealth as outsourcing picks up speed
Reuters December 29, 2003, 14:50 GMT
US corporates are shifting more jobs abroad but attempting to keep the practice quiet, according to analysts
US corporations are picking up the pace in shifting well-paid technology jobs to India, China and other low-cost centres, but they are keeping quiet for fear of a backlash, industry professionals said.
Morgan Stanley estimates the number of US jobs outsourced to India will double to about 150,000 in the next three years. Analysts predict as many as 2 million US white-collar jobs such as those filled by programmers, software engineers and applications designers will shift to low-cost centres by 2014.
But the biggest companies looking to "offshoring" to cut costs, such as Microsoft, IBM and AT&T Wireless, are reluctant to attract attention for political reasons, observers said this week.
"The problem is that companies aren't sure if it's politically correct to talk about it," said Jack Trout, a principal of Trout & Partners, a marketing and strategy firm. "Nobody has come up with a way to spin it in a positive way."
This causes a problem for publicly traded companies, which would ordinarily brag about cost savings to investors. Instead, they send vague signals that they are opening up operations in India and China, but often decline to elaborate.
Moreover, on the threshold of a US presidential election year, job losses are a hot-button issue. A company that highlighted a major job transfer could wind up in the campaign debate.
Multinationals find that when they trumpet expansion overseas, they cause problems at home. When Accenture executives in India this month announced plans to double their staff to 10,000 next year, they triggered a flood of calls to the company's US offices about US job losses.
Offshoring companies "are paying Chinese wages and selling at US prices," said Alan Tonelson, of the US Business and Industrial Council, a trade group for small business. "They're not creating better living standards for America."
The US sales director for one of India's top computer services providers said his company has won business from customers such as Walt Disney, Time Warner's CNN and the Fox division of News Corporation -- none of which wants public disclosure.
In India, some technology companies have recently adopted lower profiles. Microsoft has been removing its name from minibuses used to ferry engineers on overnight shifts. Major Indian beneficiaries of US business such as Infosys Technologies, Wipro and Satyam Computer Services have stopped identifying new customers.
While there have been reports that IBM intends to ship 4,700 high-end jobs to India and China next year, they mark a rare instance when figures "have been reported in black and white," said Linda Guyer, president of Alliance+IBM, a union that has tried to organise IBM employees.
Those numbers were not released by IBM, but rather disclosed by The Wall Street Journal, which had obtained an internal memo. The company has declined to comment.
Guyer believes as many as 40,000 of IBM's 160,000 US jobs will be transferred overseas by 2005, a figure that she says was gathered from phone calls by IBM employees.
Previously, IBM has pointed to a report by the McKinsey Global Institute that concludes the US economy ultimately will benefit. The report was commissioned by Nasscom, a group made up of Indian tech companies as well as IBM's Indian services unit -- showing an effort by those invested in offshoring to sway public opinion.
Recently, AT&T Wireless told the US Securities and Exchange Commission that it would lay off 1,900 employees this year. Communications Workers of America members obtained an internal memo prepared by Tata Consultancy Services of India that discussed how it would assume those US jobs.
Subsequently, AT&T Wireless officials acknowledged it was exploring the job shifts but didn't offer details.
While some companies, such as Electronic Data Systems, CAP Gemini Ernst & Young and Sapient, acknowledge they shift jobs abroad to exploit cost advantages and around-the-clock work, IBM asserts that it is not moving jobs but creating new ones.
"It's a business strategy, period. You cut costs. You revamp. You look at what your mission statement says and try to turn a profit," said Sylvia Thomas, who was laid off by chipmaker Agere Systems after declining offers to relocate to headquarters in Allentown, Pennsylvania -- or to Singapore.
Yes, they're called lawyers.
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Don't worry about it. The only thing that counts is that we whopped Saddam Hussein.
All the numbers show we're in the midst of a great recovery.
Apparently we've transitioned to a point where we can live well without working.
(They wouldn't be trying to fool us with those numbers, would they?)
LOL...yeah, that plus my U.S. $20 bill printing press enable me to be pretty financially stable. I did pay a visit to my doctor recently, he suggested me getting a job so that I would get out of the house more often/get more exercise/etc.
/sarcasm
The individuals that make the big campaign contributions have 'convinced' enough politicos to back things like NAFTA and other deals disfavorable to the US middle class, so they can make even more $$$.
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