One in 10 U.S. Tech Jobs May Move Overseas, Report Says

Reuters ^ | July 29, 2003 | Eric Auchard

[demlosers]

NEW YORK (Reuters) - One out of 10 jobs in the U.S. computer services and software industry could shift to lower-cost emerging markets such as India or Russia by the end of 2004, a top computer consultancy said on Tuesday.

Gartner Inc., the world's biggest high-tech forecasting firm, said in a report entitled "U.S. Offshore Outsourcing: Structural Changes, Big Impact" that 500,000 of the 10.3 million U.S. technology jobs could move just in 2003 and 2004.

While professionals in the computer industry itself are likely to bear the brunt, the report predicts that one in 20 tech jobs in industry-at-large also could be moved overseas.

This is especially true in industries with high concentrations of knowledge workers such as banking, health care and insurance, the author of the survey said.

"Suddenly we have a profession -- computer programming -- that has to wake up and consider what value it really has to offer," Diane Morello, a Gartner vice president and research director who studies work force issues said in an interview.

"Offshore outsourcing" is the euphemism the computer industry uses to describe the transformation of software development, computer services and customer call-center work.

As a global economic recession has hit hard over the past two years, U.S. companies have embraced as never before a decades-old trend to hire educated workers overseas who can be employed for a fraction of the cost of U.S.-based programmers.

Just last week, software maker Siebel Systems Inc. SEBL.O of San Mateo, California said it would cut 9 percent of its work force, or 490 jobs, and planned to move some operations overseas.

Executives of the world's largest computer and services company, International Business Machines Corp. were quoted recently as saying they had no competitive choice other than to expand software and semiconductor development overseas. The comments came to light in a recording supplied by a union seeking to organize IBM workers and supplied to Reuters. IBM now employs 5,400 workers in India out of a total work force of 316,000.

A JOBLESS TECH RECOVERY?

The debate by economists over whether the United States may now be experiencing a jobless economic recovery echoes disputes over high-tech job losses that heated up during the last technology recession a decade ago. These petered out quickly in the Internet boom of the late 1990s.

The recent acceleration of job losses actually began during the late 1990s when shortages of qualified U.S.-based workers led companies to turn overseas to countries such as India, Ireland and elsewhere for computer and Internet project work.

The mounting job losses are heating up as a political issue, with bills put forward by legislators in five U.S. states that would require workers hired under state contracts be American citizens or fill a special niche citizens cannot fill.

Morello said her study did not speculate on where such jobs were moving. But she indicated that India, Russia and other countries in Southeast Asia were the most likely locations.

She also pointed to how Canada has moved recently to position itself as a "nearshore" alternative to companies who have trouble shifting jobs to more distant "offshore" locales.

Electronic Data Systems Corp. EDS.N of Plano, Texas, the world's second largest computer services provider, has already reached into Canada and many points beyond. EDS has begun promoting its "Best Shore" strategy of positioning software and customer service work in what it says are the most cost-effective locations around the globe.

EDS has 16 centers that range from New Zealand to India to Egypt, Poland, Brazil, and Canada.

The Gartner analyst said that based on her preliminary calculations that one in 10 software services jobs are at stake at computer vendors and 5 percent of technology jobs in the wider corporate world, at least 500,000 jobs will be moved. (Additional reporting by Caroline Humer)

[Beck_isright]

"The only troll I'm into is made by Russ."

You worship childrens' toys and clothes?

"What's the point, what can we do about this? Nothing. These prgrammers started get huge salaries, and they priced themselves right out of the market."

BZZZZZZZZZZZZZZT. No, the idiots who fueled the .com boom GAVE them huge salaries. Don't blame the employee for management's short sightedness.

"There is no fix to that, and I'm tired of hearing these guys complain as if there is. They should of invested some of that money. End of Story."

You mean that money they were not allowed to invest elsewhere under penalty of having their 401K's cancelled by their employer? Or do you mean all of those "paper" profits that were embezzeled by the likes of the CEO's of Global Crossing and Worldcomm?

[holdmuhbeer]

I'm a computer programmer and I make 45k a year. Is that rich and overpriced in your book? Maybe I should ask for a salary cut and make 6k a year so I can be competitive and make myself attractive to corporate america again. Bite me.

[just_living]

Isn't fighting for truly free trade "getting tough"?

[Beck_isright]

"The only reason to fear globalization is if you think you can't be competitive in a global market. In the near future (heck right now) your customers aren't going to be low wage Wal*Mart drones, they will be the cream of the crop from around the globe. Were you saddened by the rest of the world when their standard of living was 1/20th of ours and you were living large? Did it feel unjust (what is justice?). Well I didn't. They just needed to be more competitive, and now they are starting to be. Good for them. Let us notch it up in response. Belly aching about it is doing no good."

BOT ALERT, BOT ALERT

[RightWhale]

I am forced to agree with your assessment. Most aren't ready for this and in fact have trouble getting the pups to soccer practice on time. That's okay, the leaders have always been a few who either had vision or swerved into a gold vein. The rest will be carried along by the tide.

[livius]

I agree with the basic direction of your comments. We've got to think of this as a challenge. If we sit around and howl and wait for the government to "protect" jobs for us, this country is finished.

I'm a translator, and some of my work is also being outsourced to India. But it was work I usually refused in the first place - the translation of birth certificates, college transcripts, etc. It will be badly done, but that's okay, because the only important thing in those documents are the dates and names, which will probably be correct. Furthermore, having edited a number of translations, I can say that the amount of shoddy work done here in the US by translators is so overwhelming that I can't blame clients for wanting to pay less. And I suspect that this is true of other industries, too.

Be that as it may, if we want to be stagnant and dead like Europe, let's have the government "protect" our jobs. Nothing is more sure to mean economic downfall and ultimate irrelevance.

We're Americans - we pull up our socks, move to a different part of the country, go back to school and learn something different, or start our own businesses. I'm sick of the whining.

[just_living]

BOT ALERT, BOT ALERT

Would you like fries with that? I can assure you I am not a robot.

[Beck_isright]

"Isn't fighting for truly free trade "getting tough"?"

No, it's the ranting of a mindless idiot. The concept of "free trade" is that which profits off of the back of the American employer or employee. What the hell do you think the UN, Kyoto and the Democratic party are? If you think "free trade" will exist in our lifetime, under the concept of the left, then you are correct. If you think FAIR TRADE will, not in my life time. We've been sold out. But don't tell me. Go to Wilson, NC, San Jose, CA, or Brownsville, TX. Tell the poor SOBs who live there TO THEIR FACE that you advocate these policies. When they take you out of the hospital in one of those towns, come back to us and let us know what you think.

When we enacted the concepts of "free trade" we did nothing, absolutely nothing to let our industries have a level playing field. Did we reduce regulations? No, we increased them. Were there tax incentives for domestic producers? No, we gave incentives to relocate manufacturing overseas under the guise of the Import-Export Bank. I'm sick and tired of the people on this board proclaiming free trade instead of FAIR TRADE. 80 years ago, the income tax was 1% and the government funded off of the import tariffs. No we have sold our souls and stripped our entreprenuers of the ability to compete domestically because of federal, state and local taxes and regulation. If that is your idea of "free trade" then you are a moron. Just like the 466 idiots who run our nation in D.C.

[Gritty]

high tech was supposed to be the replacement for the manufacturing industries that went overseas earlier and now it too is departing

Pretty soon those millions of jobs "no American will do" and sucked up by illegal aliens undocumented workers are going to look awfully good to millions of unemployed Americans when the unemployment benefits run out and the welfare gravy train grinds to a halt for lack of tax money.

The political party that recognizes this and does something about it is going to have a lock on elections for decades.

[Beck_isright]

"Would you like fries with that? I can assure you I am not a robot."

Newbie, that is the ultimate insult. "Bot alert" means you watch and repeat everything the Bushbots do and say. I'm glad to see you are not a reincarnation of one of the "voids" that got the Viking Kitty treatment here in the past. But think before you speak. You are sounding like an old Ari rerun.

[just_living]

If that is your idea of "free trade" then you are a moron.

I never said what my idea of free trade was, and said nothing in which you could infer it was similar to what you listed. I said we needed to "fight for free trade" implying that it was not something we had attained yet.
Sad stories are sad, whether in Brownsville or Bombay. Don't let that fool you into thinking the government can fix this with regulation.

[superloser]

Isn't fighting for truly free trade "getting tough"?

That is only part of the battle.

If you truly believe in Adam Smith Capitalism, then you'll have to admit that nobody ever pictured *capital* going somewhere else, setting up shop, and taking advantage of *free trade* to send things back.

Given that most third-world countries want to build from within a tariff wall, they should be permitted to do so. However, every one of their trading partners MUST realize that and respond with "fair trade" as opposed to "free trade" being one-way only.

Fair trade to me is a tit-for-tat tariff barrier on an entire country. If China can make widgets better than we can, so be it. BUT, if China is making the same widgets and then charging a 50% tariff on *my* widgets to destroy my access to their market, my Government is doing evil by not responding in kind and is actually *penalizing* me by subsidizing the competition with a so-called "Free Trade" deal, which we know is only one-way.

That is the problem. Level the playing field and make other countries who want to compete face what they do themselves. THAT will go a long way to truly free trade where countries that have competitive advantages will rule in their area.

Until that day, watch your customers shrink, because the overseas guy in your 'global market' makes 1/10 what the guy down the street who *was* your customer makes now....but now the overseas guy has your neighbor's job and STILL can't afford your product.

[snooker]

ALERT ALERT ...

please apply Reuters filters before reading this story.

[just_living]

But think before you speak.

Just kinda typing stream of thought, sorry to offend, just trying to work my brain with the help of others.

[Beck_isright]

"Sad stories are sad, whether in Brownsville or Bombay. Don't let that fool you into thinking the government can fix this with regulation."

Apparently you are from the shallow end of the gene pool. I inferred and have always maintained that it was over regulation that has put us at the short end of the stick. The only REGULATION that needs to be enforced is that which decreases taxation domestically and increases taxation on imports. But GOD FREAKIN FORBID, we do that. You might actually have to buy an American made set of Xmas lights instead of the crap from the slave labor in China.

[RightWhale]

"Bot alert" means you watch and repeat everything the Bushbots do and say.

Kewl.

I have never witnessed Bushbots even talking about this topic this way. There's no ideology here at all. This is bidnis.

[DannyTN]

"I wish it was the trial lawyers that were subjected to "offshore outsourcing". "

LOL Well it would be nice to send them offshore, but .... do you really want million's of trial lawyers willing to work for $1 a day???

Which of of course leads into Old Joke time...

The reasons pharmaceutical companies are now performing clinical trials on lawyers instead of lab rats....

• Lawyers are more plentiful than lab rats
• Lab Assistants don't get as attached to the lawyers
• And there's some things a rat just won't do.

[BiffWondercat]

I agree. Easy to do since failure is not an option. We are not Rome. America, with all her flaws and mistakes - just as any of us, will be alive and kicking on top of any s***heap the planet goes onto.

I say, go nuts with the deficit. Slash spending to the bone and turn it into nanotech, genetic engineering, quantum physics, fusion reactors, ect. And, most important,
advanced propulsion systems to get me off this rock 'cause that probably won't happen fast enough.

[Destro]

Pat Buchanan was IS right!!!!

[Destro]

So Bush-Clinton-Bush should be on trail along with the yes voting congress over NAFTA?