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.

[thegreatbeast]

Here is a good article written by Diane Alden on this point:
http://www.newsmax.com/archives/articles/2003/5/22/15302.shtml
Anybody who thinks that this is a simple matter of competition between national workforces is numb and dumb. What nonsense. How did you get here, Rube? Ride your unicorn?

[Rebelbase]

No doubt there are a lot of people who are making a great living at programming and will continue to do so, as they are already networked into the industry.

We are seeing the beginning of an entire portion of a high tech service being sent overseas because its cheaper to get the same thing done here, done over there.

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. Its the networked environment we live-in, doen't matter where your physical office is so long as you are wired into the system.

No reason to shoot yourself, but its coming. I would recommend to anyone contemplating going into generic programming to have a backup skill that can offer the same pay rate.

[per loin]

His parents should now do the American thing, sue the Bank for causing their son's death. As we have not yet outsourced our court system to Asia, the jury will likely find in their favor to the tune of many millions. A few dozen such suits and the Bank would find it much cheaper to not outsource.

[Sonny M]

Another thing I heard (maybe someone else knows more) is that in India, higher education is subsudized and people are generously rewarded for going into the technical fields.

How do you define subsidized? I wouldn't say its anymore so then here. In a weird twist, culterally, people are rewarded for going into technical fields, its more prestigious then being a laywer and in many cases even a doctor. Alot of the doctors over there, leave and come to the U.S. and are usually surprised by the change over here. Many engineers and techies over there, have the goal of getting a good education and then leaving and coming here. While I'm sure they are not upset to see the jobs come to them, many of them preferred to be here first.

[oceanview]

forget the generic programmer, there are ZERO job openings for those college grads in Fortune 500 companies. The Fortune 500 is busy figuring out how to get all of those jobs moved overseas. This may be an overstatement to use the words "zero" and "all", but in the macro sense, its pretty close....

[WhiteKnuckles]

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?

Easy. This country is doomed.

[CedarDave]

When will the trend to outsource lawyers start?

Boy, I'd go for that!! Trained lawyers that won't charge 50% in fees. And when they become really experienced, they can go back to their own country and mess up the legal system there, too. Then we'd be able to compete again!!

<<< pulling on flame-retarding suit >>>

[YankeeReb]

Go to Mercedes Benz and train to be one of their automotive technicians, and get a job at the dealership out of high school, even if you start out prepping cars, and move up the ladder. You would be amazed at what these tecnicians and service managers earn, but stick with the high end dealerships: Mercedes, BMW, etc.

I'm not sure if you're being sarcastic or not, but that is a very good approach. Get into some field which can't be outsourced overseas, which requires skill, and which can't be flooded with underpaid labor too easily. I'm seriously considering telling my kids to skip college and go to a trade or technical school.

[softengine]

If others are willing to make those sacrifices, and you are not, then why should they not take your job?

Are you related to Illbay?

[FoxPro]

I am now working on getting projects outsourced to Russia and India. They work for something around $6 per hour. They are very good, and work hard. The reason this is now happening is because the Internet hit about 10 years ago. It took these people 10 years to lean English and Oracle, Java, SQL Server ect. They all learned English by studying technical resources on the Internet. They don’t speak English, but can read and write it very well; since that is the way they learned. They are now teaching their kids to speak English.

I am patriotic, but I sent out 24,000 resumes to email addresses that I snaked from the major job boards, and ended up with essentially nothing. I have a stellar resume. The local shoe store will not even look at my resume because of my work history. I am nearly out on the street, my wife is divorcing me, I am penniless and I am losing my house. In fact the only thing that saved me is the fact that my house doubled in value over 3 years. How long do you think that will last? If you live in the DC area and you don’t have a security clearance, forget about it, your toast. It is time to move on. If you can’t beat them join them.

[BrooklynGOP]

Eliminate the middle class and Benz/BMW won't have that many customers.

[El Gato]

what should this years high school grads be majoring in for future job potential?

In general they should do what interests them. Otherwise they'll just be miserable. Now you can't get too carried away with that philosphy, otherwise we'd be hip deep in PE, English Lit, and Poly Sci majors. :)

Still, if one's expectations are not unreasonable, one can be very happy running a gym, writing advertisments and other such copy, or running for dog catcher. :) just don't expect to make alot of money doing it.

The best thing might be to go to plumbers, electricians, or auto mechanic school. People will always have need for those sorts of things. Ditto with medical careers, although you can get too many of certain specialists.

Nothing is guaranteed, I remember a nursing glut, but at the moment there's a shortage, even including bringing in lots of foreign educated nurses. Even during the glut, registered nurses, those with 4 year degrees, or even master's degrees did OK.

Even if one could look 4 years into the future, you couldn't look 10 or 20, which is yet another arguent for going with something you genuinely enjoy, knowing that you'll probably have to change along the line somewhere, maybe several times. Of course sometimes you end up doing something you thought completely unrelated to your major, but actually related at some level, maybe requiring the same sorts of skills, or maybe an way to apply the knowledge in unexpected ways.

[oceanview]

Not at all, I would consider doing that myself as a mid life job change if I was unable to hold/get my job in IT, but I may be too old.

I am telling the truth, an experienced automotive technician at a Mercedes dealership can easily make $75K or more.

At the NY auto show this year, Mercedes was recruiting for technicians at the show.

[TheSpottedOwl]

Another coward takes his own life rather than adapt to changing circumstances.

Nice. Would you have rather had him take a Winchester 30-6 and shoot all his coworkers first before taking his life?

[Huber]

No reason to shoot yourself, but its coming. I would recommend to anyone contemplating going into generic programming to have a backup skill that can offer the same pay rate.

It's not an easy pill to swallow, but the same story happens again and again. We discover a great gig, become successful, get complacent and someone figures out a way to eat our lunch. In order to ensure our success, we need to be agile, innovative, and build our nest egg to prepare for the future. The 90's were amazing, but they weren't real. So now, we're in a position of figuring out a way to capitalize on this networked economy or be left by the wayside.

I believe that the former will be the path of most conservatives.

[BrooklynGOP]

I am telling the truth, an experienced automotive technician at a Mercedes dealership can easily make $75K or more.

Nor for long. Outsource all the jobs and there will be less Benz drivers. Which would lower the demand for Benzh technicians. Which would lower the salary...

[Tokhtamish]

How very, very true.

Smug fools go on with Ayn Rand nonsense. This is a conspiracy by a transnational elite with no accountability whatsoever to destroy the American standard of living to enrich themselves.

Texasaggie asked if a previous poster was a union member. Do you see European countries exporting their skilled jobs ? No, you don't, because their powerful unions would never stand for it. European workers have a strong voice to protect their standard of living. American workers don't.

[softengine]

Thank you so much - You are fighting the good fight here.

I recently read an article in new.architect that all but repeats this one. The shift to outsourcing has been growing steadily over the last few years, but has had little attention paid to it.

What the spoilers here don't recognize is the impact this has on not only workers in the IT sector, but on the economic stability of the country as a whole.

[FR_addict]

Thank you for posting.

I lost my job with a high tech company that is outsourcing many tech jobs. I can speak from my own experience and from friends in the field.

Top execs in major companies are going for the short term solution to prop themselves up so they can continue to receive their huge bonuses while the average working joe is living in fear that his job will be next. The ones left have to train their Indian replacements that come over for a few months before they take the job back home.

The top execs are not working to bring about long term solutions to the companies they managed but figuring out how to retire with the most money in their bank accounts.

Laying off employees is popular with the shareholders right now. Hiring Visa workers and contracting the jobs to offshore companies comes under "other expenses".

I was willing to move anyplace in the states for a job. I landed one in another state after two years. My spouse can't find a job in this area, so we are separated hoping for the economy to improve.

I want to enjoy life, but I can't. I worry everyday about my job, about finding a cheaper place to live, about how many extra hours do I have to put in to keep my job. I put in long hours every day and work every weekend so I haven't been able to go home, plus it's expensive to fly home.

Managers are measuring how many hours are being worked rather than the quality of the work. The ones working are waiting for the axe to drop. There will be layoffs at my new job, either this week or next. We know this for sure, but we weren't told the size of the layoffs.

Will I be on the list? Will my friends be on the list? Morale is terrible at American high tech companies and product quality is very poor.

I am sorry there are so many that feel this guy was a loser on this thread. I can feel his pain, knowing what it was like to go through the layoff at my age after I was working night and day and weekends for the company that laid me off.

I think it is shortsighted not to see this as a problem that is affecting the American family. We can not compete with people in third world countries that are being paid much less than what you can live on in America.

The interesting thing is that the companies are paying a lot more per worker than the average Indian worker gets. There are kickbacks going on under the table. That is why this practice is so popular, the work is usually inferior and the American worker is expected to debug the delivered software.

I want to mention one company that does not hire Visa workers and I don't believe they use offshore workers. Their turnover rate is probably one of the lowest in the industry. The name of the company is SAS. By putting America and their workers first, the company is in a very strong financial position. Morale is super high and they make quality products. I wish the shareholders of more companies would emulate the practices of SAS.

[El Gato]

Who's he going to train if there is no demand for IT labor in US?

There are other things to train people for than IT. Many times, but not always, knowing how to conduct training is as inportant as knowing the material. For the material you can get Subject Matter Experts(SMEs). My Division of my company does a lot of training stuff for the military. We don't (usually) conduct the training, but we generate the materials, everything from paper course materials such as student and instructor guides, to interactive courseware, to Web based training. The part I work in builds hardware/software simulator systems used to conduct training. Some virtual reality stuff, some "emulators" and some more basic stuff too. We have very few SME's depending on the customer to provide those. Although in some sense, I'm one of those few, depending on the system being considered.