High-Tech Hijack: Corporations ramp up offshoring of IT service jobs — In These Times — When you read between the lines with these stories you tend to find age discrimination at the core. What makes it even worse is that the older employee is axed but they don’t even bother to hire an American to replace him.
Stephen Gentry had worked as a programmer for Boeing for 15 years before he was laid off in July 2003. His last project was training his replacements, software engineers from India. They were working in Seattle on temporary visas before returning home to do Gentry’s job at Infosys, one of India’s leading subcontractors of information technology (IT) services.
Eighteen months later, Gentry, 52, who earned a computer sciences degree while working as a construction worker, still hasn’t found a job.
via R. Sanchez
It’s simply SHOCKING how short term US companies think. Here’s a scenario: Let’s assume that American corporation X decides to outsource the production of its work to India. Exactly what does X become? A middle man. What happens to middle men? They disappear when they’re no longer relevant.
I’d guess that in about 10 years or less all the work done in India on behalf of US companies will be done on behalf of Indian companies. So instead of India creating software for Adobe, it’ll simply start creating and selling its own software.
In other words, not only will there be no jobs left in our country in ten years, we won’t even have any large corporations left! We’ll have NOTHING left!
Yes, Ima, but in the meantime the guys that sold outsourcing to their respective companies GOT RICH – that’s all that matters until your government stops it. It’s just another predatory management practice.
Large corporations are sloppy. Look at the AOL Time deal. The executives decide that the company is too small or $20 billion in sales is chump change. If we just merge, we can all lift millions from our new company and call it savings. Look at the HP/Compaq deal. The telco execs got bored and decided they didn’t screw up the phone system enough. Hey we can really screw the PC industry. We can replace all the employees with PC hardware. In the end they replaced the CEO. Maybe the Carly can go live and work in China or run for NAFTA commissioner in Washington. The CEO gets a we luv ya, good luck, golden handshake and the shareholders and employees get a golden shower. The next bad big idea is the MCI Verizon deal. Competition keeps things more secure. Destroy competition and you have less security and less natural selection. Airlines are a great example of the growth by merger mess. It’s a multinational demolition derby.
You can call it age discrimination or whatever, but you know that isn’t it. Some keyster in a seat costs $50,000 and can be replaced for $10,000. That guy simply isn’t going to have a job for long.
The nerd drain and the clerical worker drain will continue for quite some time. Such is the short term fate of countries wealthy beyond imagination in a world where information and communication speeds are high.
How can we beat cheap labor? Bring in the robots.
Pray tell … with all of the simulation/engineering software available, why are not more manual tasks automated? Or is this coming soon and it just hasn’t hit yet.
I can see it from both directions.
On the one hand you have aging workers who make major money because they’ve been there forever. On the other hand you have really seriously cheap labor somewhere else who can theoretically do the same job.
The pros for the older workers are things like familiarity with current systems, generally better communication and a local presence.
The pros for the foreign workers is that they tend to be younger and as a result are probably more familier with current IT trends. (For instance, an old mainframe vs distributed servers) Also, let’s not forget that they are cheap, cheap, cheap!
The cons for the older US worker is that while they may be very familier with an older system they may need expensive training to work with newer systems. The one thing people often don’t realize is that just because you have an IT person who can perform an eight out of ten consistently on an old mainframe, it doesn’t mean that person will necessarily become an eight out of ten (or even a five out of ten) on Windows or even Unix systems.
From a managment point of view I could see dropping $50,000 a year salary for a $20,000 a year payment. Theoretically, the foreign worker should have the skills with a performance in the six out of ten range. If they take a gamble that the employee can be retrained at $1000 – $3000 per class then it costs them continued high wages plus training costs for the same or less performance.
The cons of the outsourced worker are obvious to anyone who has had to deal with any kind of call center in another country. Communication! Plus, they aren’t on site and if you think poor communication is bad with a help desk, try actually doing development with it! It’s a nightmare…
I worked with a team of five very nice programmers from India who had lived in the US for several years. They were working for an Indian company and were based in the US. Unfortunately, there was only one team member who was truly fluent in English. The rest could speak some english but were very difficult to understand. (Not just from an accent point of view but also a cultural reference one.) We were never quite sure if we got our point across in conversations. The worst part is that this was face to face! I can’t imagine how it would have gone if we were just teleconferencing.
Another hidden item is that often when peoples jobs are “outsourced” it is a convenient hands off way to get rid of an expensive employee who isn’t performing well or isn’t well liked.
Unfortunately, I think as far as tech resources goes, management is seduced by the price and as far as communication goes… Well, they never understood the techie geeks anyway.
The other thing I forgot to mention is that often the worker allows themselves to get in this situation. The IT industry moves quickly and we must constantly learn in order to stay afloat. You may be the end-all be-all in PL1 programming. But that and a paper hat will get you a job flipping burgers when the mainframe is decomissioned.