Outsourcing backlash hits India

NY Times via Seattle Post-Intelligencer ^ | February 17, 2004 | SARITHA RAI

[sarcasm]

BOMBAY, India -- The rising political reaction in the United States to the loss of some American jobs to workers overseas is creating a whiplash effect among India's leading technology companies.

"The dramatic buildup of opposition before the U.S. elections is disturbing," Jaithirth Rao, the chairman of a leading software and call-center company, MphasiS BFL Ltd., said in an interview at the three-day annual meeting of Nasscom, India's software industry trade association last week.

MphasiS, based in Bombay, has 6,000 employees, and its operations are spread across the cities of Bangalore and Pune. More recently, it has expanded to Shanghai, China and Tijuana, Mexico.

Companies such as MphasiS are the biggest beneficiaries of a movement among many of the largest corporations in the United States to shift certain white-collar work to low-cost India, where local companies are adding thousands of skilled, English-speaking employees every quarter to meet the increased demand. At the same time, companies such as General Electric and Microsoft Corp. are expanding their operations in India on everything from basic customer service to high-end research and development.

The political reaction in the United States against such outsourcing has built rapidly in the last year; nearly two dozen states have voted on legislation to ban government work from being contracted to non-Americans.

More recently, the Senate approved a bill aimed at restricting outsourcing of contracts from two federal departments. The House has not acted on similar legislation.

"We are concerned that this is federal legislation and that it is sponsored by a Republican," said Kiran Karnik, president of the software association. "Republicans are traditionally free-marketers."

Karnik, who has been vocal in promoting the cost-saving advantages of India's workforce, said he was perturbed that "all of the election-year rhetoric equates offshoring with job losses."

More than 70 percent of India's software export revenue comes from companies based in the United States, but less than 2 percent of India's export earnings comes from work for American governments, and the software and related service industries account for only 3 percent of India's economic output.

Still, the industry is increasingly associated with the Indian economy's upbeat mood, and its leaders are anxious. As fears of American white-collar job losses continue to rise, they say, the issue is expected to become a sticking point in trade negotiations between India and the United States.

Gartner, a technology research firm, predicts that the outsourcing reaction will continue to escalate at least through the fall.

"The aggressive campaign against moving work to low-cost destinations will become a political imperative for the presidential campaign," said Partha Iyengar, a Gartner vice president for research who is based in Bombay.

American corporate customers of Indian software companies were not conspicuous at this year's annual meeting. Corporations in the United States, and the Indian companies they contract with, kept a low profile.

However, Cognizant Technology Solutions, a company based in Teaneck, N.J., has 70 percent of its development operations in India and said it was still seeing five to eight customers and prospective clients from the United States every week at its offices in Chennai in southern India.

In a further indication that outsourcing is likely to be an increasingly touchy subject here, Robert Blake, the U.S. charge d'affaires in New Delhi, said last week that India's best response was to open its markets wider to help create other jobs in the United States.

Blake's remarks rankled India's government. "That is not the way to go," said Yashwant Sinha, the external affairs minister. "It smacks of retaliation that 'if you don't open up, we will impose restrictions,' " Sinha told reporters last week.

"The U.S. has to realize that by outsourcing, its companies remain competitive and save jobs," Sinha said.

[sarcasm]

"It smacks of retaliation that 'if you don't open up, we will impose restrictions,' " Sinha told reporters last week.

[kenth]

Looks like they want to keep Free Trade Street one way.

[300winmag]

Companies such as MphasiS are the biggest beneficiaries of a movement among many of the largest corporations in the United States to shift certain white-collar work to low-cost India, where local companies are adding thousands of skilled, English-speaking employees every quarter to meet the increased demand.

After having used Dell's offshored customer support, I can state that these people are certainly not skilled in either conversational English nor PC technical support. Very strong accents, and entirely script-driven. They also tend to be rude when you try to break out of their scripts.

Our organization has over 7500 Dell systems. It was sometimes difficult working with their American tech support, but even the smallest problem was agony with the Indians. However, Dell didn't seem to mind burning up hours of satellite time on one call, or sending three parts out before the one I really wanted arrived. At least, not until their corporate customers started to really complain.

American companies desperate for instant cash savings see offshored tech support as employing PhDs with perfect English, and instinctive knowledge of the product. In reality, they're getting people who work for one-tenth the pay, but do one-tenth the productive work. But that doesn't show up on this year's balance sheet.

I have not yet had a single encounter with an offshore tech support that I'd rate as good as even a medicore American operation. The unspoken ground rules behind all this controversy is that Americans are overpaid, someone else working for one-tenth the cost is world-class, and clients won't notice the extra grief they have to put up with.

[sarcasm]

Indian tariffs are the world's second highest.

[.45MAN]

We need public disclosure of companies outsourcing and the number of jobs that are sent overseas.. I have run into problems understanding these people. I would rather talk to a computer..

[ColdSteelTalon]

Well when enough white collar workers are losing their jobs maybe America will wake up and vote both parties out of office.

[thoughtomator]

CNN runs regular segments listing companies that are offshoring.

[vikingchick]

The good news it that since the Indians and Chinese have all gone back to their home countries taking our jobs with them, the high-priced homes they owned in the Bay Area sit a-waiting for some dumb American to pay a bunch of money for it.

Sit tight, my friends. Wait for the housing prices to hit rock bottom.

[Walkin Man]

Watch the Lou Dobbs show. He has a story everyday I think called Exporting America.

[Clock King]

The U.S. has to realize that by outsourcing, its companies remain competitive and save jobs

Incredible doublespeak. Whose jobs?

[A. Pole]

As fears of American white-collar job losses continue to rise, they say, the issue is expected to become a sticking point in trade negotiations between India and the United States.

"It smacks of retaliation that 'if you don't open up, we will impose restrictions,' " Sinha told reporters last week.

"retaliation", "negotiations", "restrictions"? Very confusing - one would think that it is free market and not the government engineering this process!

[Glenn]

"That is not the way to go," said Yashwant Sinha, the external affairs minister.

Damn. They are pretty smart.

We've been duped again.

[citizen]

"We need public disclosure of companies outsourcing and the number of jobs that are sent overseas."

3Com
3M

A
Accenture
Adaptec
Adobe Systems
Advanced Energy Industries
Aetna
A.G. Edwards
Agere Systems
Agilent Tech.
AIG
Alamo Rent A Car
Albertson's
Alliance Semiconductor
Allstate
Alpha Thought Global
Amazon.com
AMD
American Express
American Management Systems
American Standard
Amphenol Corp.
Analog Devices
Andrew Corp.
AOL
Applied Materials
A.T. Cross Company
AT&T
AT&T Wireless
A.T. Kearney
Avanade
Avery Dennison

B
Bank of America
Bank of New York
Bank One
BearingPoint
Bear Stearns
Bechtel
BellSouth
Best Buy
Black & Decker
BMC Software
Boeing
Brocade
Bumble Bee

C
Cadence Design Systems
Capital One
Carrier
Cendant
Cerner Corporation
Charles Schwab
ChevronTexaco
CIBER
Ciena
Cigna
Circuit City, Inc.
Cisco Systems
Citigroup
Coca-Cola
Comcast Holdings
Computer Associates
Computer Sciences Corporation
Continental Airlines
Convergys
Cooper Tire & Rubber
Cooper Tools
Countrywide Financial
COVAD Comm.
CSX
Cummins

D
Dell Computer
Delphi
Delta Air Lines
Direct TV
Discover
Document Sciences Corp.
Dow Chemical
DuPont

E
Earthlink
Eastman Kodak
Eaton Corporation
EDS
Electroglas
Electronics for Imaging
Eli Lilly
EMC
Emerson Electric
En Pointe Technologies
Equifax
Ernst & Young
Evolving Systems
Expedia
ExxonMobil

F
Fair Isaac
Fedders Corporation
Fidelity Investments
Financial Techologies International
First American Title Ins.
First Data
Fluor
Ford Motor
Franklin Mint

G
Gateway
GE Capital
General Electric
GlobespanVirata
Goldman Sachs
Goodrich
Google
Greenpoint Mortgage
Guardian Life Insurance

H
The Hartford Financial Services Group
HealthAxis
Hewitt Associates
Hewlett-Packard
The Holmes Group
Honeywell
HSN
Humana

I
IBM
IndyMac Bancorp
Infogain
Innodata Isogen
Intel
Intl. Paper
Intuit
Invacare
ITT Educational Services

J
Jabil Circuit
Jacobs Engineering
Jacuzzi
JDS Uniphase
Johnson Controls
Johnson & Johnson
JPMorgan Chase
Juniper Networks

K
KANA Software
Kaiser Permanente
Keane
KeyCorp
KLA-Tencor
Kwikset

L
Lawson Software
Lehman Brothers
Levi Strauss
Lexmark International
Lifescan
Lillian Vernon
Linksys
Lionbridge Technologies
LiveBridge
Lockheed Martin
Lowe's
Lucent

M
Maritz
Marshall Fields
Mattel
Maytag
McDATA Corporation
Medtronic
Mellon Bank
Merrill Corporation
Merrill Lynch
Metasolv
MetLife
Microsoft
Monsanto
Morgan Stanley
Motorola

N
Nabco
National City Corporation
National Life
National Semiconductor
NCR Corporation
neoIT
NETGEAR
Network Associates
Newell Rubbermaid
New York Life Insurance Co.
Northwest Airlines

O
Office Depot
Ohio Art
ON Semiconductor
Oracle
OshKosh B'Gosh
Otis Elevator Co.
Owens Corning

P
palmOne
Parker-Hannifin
Parsons E&C
Pearson Digital Learning
Pericom Semiconductor
Perot Systems
Pfizer
Pitney Bowes
Planar Systems
Portal Software
Pratt & Whitney
Primus Telecom
Procter & Gamble
ProQuest
Providian Financial
Prudential Insurance

Q
Qwest Comm.

R
Rainbow Technologies
Radio Shack
Raytheon Aircraft
RCG Information Technology
Regence Group
Rogers
Rohm & Haas
RR Donnelley & Sons
Russell Corporation

S
Sabre
SAIC
Sanmina-SCI
SBC Comm.
SEI Investments
Siebel Systems
Sikorsky
SMC Networks
Solectron
Sovereign Bancorp
Sprint
Sprint PCS
Starkist Seafood
State Farm Insurance
State Street
StorageTek
SunTrust Banks
Supra Telecom
SurePrep
The Sutherland Group
Sykes Enterprises
Synygy

T
Target
Tecumseh
Telcordia
TeleTech
Tellabs
Texas Inst.
Thrivent Financial for Lutherans
Time Warner
Tower Automotive
Toys "R" Us
Travelocity
Triquint Semiconductor
Tropical Sportswear
TRW Automotive
Tyco Electronics
Tyco Intl.

U
Union Pacific Railroad
Unisys
United Online
United Tech.

V
VA Software
Veritas
Verizon
VF Corporation
Vishay

W
Wachovia Bank
Washington Group Intl.
Washington Mutual
WellChoice
Werner Co.
West Corporation
Weyerhaeuser
Whirlpool
Wolverine World Wide
Wyeth

Y
Yahoo!

[FreedomPoster]

I'm on a general interest forum regularly, primarily because it's a good place to engage libs when discussions turn to political topics. There are a lot of techie types on the board, and computer questions get asked and answered regularly. Everyone is nailing Dell for the poor quality of their offshored technical support. The corporate guys with U.S. support are happy with it.

Bad move, Michael.

[.45MAN]

Ok! I am impressed, really. I think that I will copy this and contemplate what kind of e-mail I will sent to some of these companies..

[AndrewB]

Next time someone with a thick Indian accent calls and says his name is Tim Johnson (or other American sounding name) from AT&T Call Center (or other corporate giant), ask him what city he is calling from. The reaction is interesting; they are obviously forbidden to tell the truth about their name or location.

[RussianConservative]

Empty threat...how India/China retaliate when most of economy built to export to US? They loose any trade war bad.

[RussianConservative]

Begin compileation of list here on FR and post once gathering done send to media.

[DustyMoment]

Great analysis; comments well said. I agree totally.