Outsourcing hits US techies hard

Times of India ^ | MAY 26, 2003 | CHIDANAND RAJGHATTA

[Lessismore]

WASHINGTON: On a recent April afternoon in Silicon Valley, moments after he was told he had been laid off from his computer programming job at a Bank of America training centre, Kevin Flanagan stepped into the parking lot and shot himself dead.

Some of America's technology workers, who like Flanagan have also had to collect pink slips over the last several months, think they know why Flanagan took his life: Bank of America not only outsourced his job to India, but forced him to train Indian workers to do the job he had to give up.

In the weeks since his death, the techies have used the incident as fuel to fire a campaign against outsourcing to India, an issue that now seems poised to become a major sticking point between the two countries. Several US states are already considering legislation to ban or limit outsourcing.

Bank of America is one of several major US corporations – General Electric, Microsoft, Intel are among others - under scrutiny for outsourcing jobs to India. The Bank created what is called a "Global Delivery centre" in 2000 to identify projects that could be sent offshore.

Since then it has signed agreements with Infosys and Tata Consulting Services (TCS) to provide solutions and services.

In an e-mail exchange with this correspondent, Kevin's father Tom Flanagan said "a significant reason for which my son took his life was indeed as a result of his job being outsourced."

"Did he blame India for his job loss? No. He blamed the "system." He couldn't understand why Americans are losing jobs. Rather I should say he understood it economically, but not emotionally," Flanagan said.

Bank officials, who did not return calls relating to Flanagan's death, have said in the past that the deal with Indian companies would effect no more than 5 per cent of the bank's 21,000 employees, or about 1,100 jobs, in its technology and operations division.

According to some surveys, the US has lost at least 800,000 jobs in the past year and some 3.3 million jobs will move overseas over the next few years because of outsourcing, mostly to India.

The Bank has also acknowledged that it had asked local workers to train foreigners because such knowledge transfer was essential. According to Tom Flanagan, his son was "totally disgusted" with the fact that he and his fellow-workers had to train foreigners to do his job so they could take over. "That sir is a travesty," he said in one e-mail.

US tech workers are challenging the corporate world's claim that it is outsourcing work to improve bottomlines and efficiency. Some analysts have also pointed out that US corporations were being forced to tighten up by the same people who are moaning about outsourcing, and who, heavily invested in the stock market, demand better performance.

But on one website that discussed the Flanagan case, a tech worker pointed out that data processing consumed only a small per cent of revenues and was hardly a drain on the Bank's profit.

"(It is) a prosperous bank which has let greed trump any sense of patriotism or social responsibility," he fumed.

[Pukin Dog]

Have you forgotten the late 70's?

When unemployment was almost DOUBLE what it is now, I do not remember people running to embrace a new Hitler.

If you are going to invoke historical talking points, you might start with that little factoid.

[DAnconia55]

You're pretty on target. One minor correction.

In a democracy, I am not entitled to a job

No, in a capitalist or FREE society you are not entitled to a job.

But if folks here have their way, it will be a democracy (not a republic), and you WILL be entitled to a job.

[oceanview]

Europe is doing nothing, except talking, to retain their skilled jobs. Auto manufacturing in Germany is moving to eastern europe and elsewhere. These "powerful unions" are doing exactly what the "powerful unions" in the US are doing to stop foreign workers: nothing.

The point is that Europe is where we are going to be in 10-15 years (if we ever decide to count our unemployment numbers honestly).

This is the main point to be made to people on this thread who think that there is nothing to worry about, that we must embrace the "free market, free trade" mantra to the end. That is the fastest way towards socialism in this country, because the political system will pick up this issue in the form of the Democratic party promising "stuff" to the displaced workers, and they will get votes out of it, enough to put them over the top and into power. So the example of Europe is not a good one, its where we are going if we don't take some reasonable actions to mitigate this.

[Pukin Dog]

You are killing me.....

[El Gato]

who are fine living on $100-150.

To be fair, that number was for students. Even American students live pretty cheaply, tuition aside that is.

[Calopodius]

I have worked as a software developer for 30 years. That implies my age.

The company I currently work for sells software and services to major banks. They are working on a pilot project to move some development to India.

When I demanded the right to buy imported shoes and clothes for my children, I felt sorry for the workers in those industries who were being displaced. But I was convinced - I am still convinced - that I had no obligation to keep them in jobs that could not produce enough to make them competitive in the labor market.

Now those people have no obligation to keep me comfortably employed when they want lower bank fees made possible by reducing information technology costs.

Am I scared? Yes. Am I doing everything I can to keep my skills curent and generate enough revenue for the company to meet my salary + overhead + profit. You bet.

Because the US economy is less burdened by government and restrictions on employment than old Europe, we are much better off. If I lose this job, I can count on getting another. It may not pay as much as I need/want. It may not be doing what I want. It will be something where I can be worth my pay.

[Huber]

But what about ME????

[Outlaw76]

I agree that he should not have killed himself, and that his death should not be used to to advance any agenda.

That being said, I've gotta ask you what you do. Why? because I am an IT worker. I'm skilled at what I do. I like the work I do. There are not that many people in this country that are as interested or as good as I am.

I used to work in Electronics, I was very handy with a schematic and a soldering iron. I loved that kind of work. Oscilliscope's and multimeters were always on my wish lists for holidays. I can count in binary - while I sleep. Other than perhaps HAM radio, those skills are pretty much useless now.

I want to know what you do. What it is that you enjoy, what kind of job makes you feel like you have occomplished something during a days work. What is it that you do that fuels your creative urges and drives your mind to work harder.

Why do I want to know? Because if the current trend keeps up, I will need to change my carreer feild again. I'm pretty bright and I might just be a hell of a lot smarter than you. Also, I'll be willing to take less pay - because I'll be unemployed. So tell me, what is it that YOU do?

[Pukin Dog]

I think there is a growing segment of popular culture that feels better if there is something to become up in arms about. They only describe to me what they really believe about their own ability.

I see that there is a group of you who have taken names from Atlas Shrugged. If not for the World Famous Fighting 143, I might have done so myself.

[LibertarianInExile]

What about bad credit from being unemployed for a year? It's amazing how credit makes a difference in your ability to get a job--if you have lousy credit, generally it's because you NEED a job.

[Drew68]

What happens when the next bank, and the next bank, and then a big investment firm, then Visa, MasterCard and American Express, etc. outsource all their customer service?...People are going to lose jobs.

Of course, those folks that lost their jobs won't be making payments on their Visa, MasterCard and American Express bills. They won't be keeping money in the banks. They won't be buying new computers, cars and television sets.

How is this going to be good for the businesses who outsource their jobs? Indians, Chinese and Mexicans certainly aren't buying the products that these companies make.

It is going to come back around and bite these companies in their asses.

[TaxRelief]

Hey, yea! They should do the "American" thing and join a union. Then they can be told what to think and how to vote while they're sitting in a Union Hall waiting for a job. (At least they get to wait in a nice orderly line, this way)

[DAnconia55]

I was in it when I was a clerk.

Hmm... I never was. Even when in my first burger flipping job.

[Pukin Dog]

I don't do anything, and I haven't since January.

Currently, I sit on my widening rear end playing with a computer that I bought a few weeks back while I ponder career choices.

Prior to that I was a trained killer and heartbreaker of women the world over.

[DAnconia55]

I think the most absurd post on this thread tried to claim that workers now are worse off that their grandfathers.

Guess modern medicine, computers, total indoor plumbing (Well except for Arkansas), modern highways, the internet, greater energy efficiency, etc, etc... count for nothing.

[Texaggie79]

I just needed the proper education....

[RaceBannon]

China has a controlled economy and a rising standard of living. In fact all these economies that we are offshoring our jobs to do not practice free trade at all, yet they have a rising level of prosperity.

I hope you didnt mean that the planned economy was the reason they are prosperous?

They are prosperous because of capitalism exercised by corporate Western companies, who in order to compete in the world economy, outsource the manufacturing to cheap labor nations, and then sell the product completed to westerners at high prices at exhorbant profits! Capitalism at it's finest!

It certainly proves capitalism works, but my arguement is, what are we supposed to do now? If we arent making things at a salable cost rate, what are WE supposed to manufacture for ourselves? Where does OUR employment come from?

IF it costs too much to run a company here that can make an item at a profit because of overseas competition, what am I supposed to produce? And how am I supposed to pay people to work for me if all my costs are eaten up because of payroll that while 1/2 the American norm, it is still 10X the World standard wage?

[balls]

Sorry Pukin, but your motto ("Sans Reproache") is not appropriate at all because, just as the author in beginning of this thread, you used "effect" when it should have been "affect". Shame on you!