- A report that IBM Corp. plans to move 4,730 high-paying
programming jobs from America to cheaper countries is just part of more
to come, labor activists said Monday. That picture includes Poughkeepsie,
said a story Monday in the Wall Street Journal, which attributed the word
to internal documents labeled ''Global Sourcing.''
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- But it will get worse, perhaps 30,000 to 40,000 jobs
by the end of 2005, if Lee Conrad's sources point in the right direction,
as they often have. Conrad is lead organizer for the Alliance@IBM, a unit
of the Communications Workers of America.
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- He said Monday the trend is becoming a crisis not just
for workers but for the American economy.
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- ''We should start discussing concerted activity to stop
this flow of our jobs being offshored,'' Conrad said.
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- The paper's story said the ''offshoring'' would come
in 2004 and the company has already hired 500 engineers in India who will
get some of the early work in a group called Application Management Services,
part of IBM Global Services, which contains half of the company's 315,000
employees.
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- Also on the hit list are Southbury, Conn.; Raleigh, N.C.;
and Boulder, Colo., the paper said, citing company documents on the initiative.
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- James Sciales, spokesman for IBM Global Services, wouldn't
confirm the group in question or its locations, but said it provides management
of software applications much in the same way IBM provides data processing
to clients. This could include things like old ''legacy'' programs where
IBM would update and maintain and modernize those applications for a client.
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- But on the reports of major offshoring, IBM offered no
confirmation, no denial and no details.
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- This statement was given by Sciales:
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- ''While we do not comment on internal presentations or
projections, the vast majority of the growth in application services that
will occur in markets like India, China and Latin America will result from
winning new contracts, especially in high-growth areas like Business Transformation
Outsourcing.''
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- ''We expect our hiring next year in the U.S. to equal
or increase over 2003 levels. In fact, on a percentage basis, our forecast
is for hiring across the Americas to outpace the hiring in the rest of
the world,'' he said.
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- ''The Americas,'' in IBM-speak, includes the Western
Hemisphere, and does not mean just U.S. jobs.
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- IBM also has conducted hiring simultaneously with mass
layoffs.
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- ''It's a big smokescreen,'' Conrad said. ''They cut a
bunch of people here and buy up another company there.''
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- While no authoritative data is available on the numbers,
schedules and locations of jobs to be lost to offshoring, the reports are
not at odds with IBM's own statements.
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- Offshoring called key strategy
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- Even the CEO and chairman, Samuel Palmisano, has stated
that offshoring is a key part of the strategy for keeping IBM competitive.
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- In May, Palmisano told analysts of his trip to Bangalore,
India, where IBM has a software center in that low-cost country.
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- ''We already have several thousand people in these jurisdictions,''
Palmisano said, adding IBM was ''expanding like crazy.''
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- He also saw potential ''in these lower-cost labor markets
to create a huge business process outsourcing business.''
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- On Oct. 30, Palmisano told the Council on Competitiveness
in Washington, that China, India, South Korea and other rapidly developing
nations are replicating the structural advantages that the U.S. had.
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- ''It is important to understand that these nations are
becoming very competitive -- and not just in wage differentials,'' Palmisano
said.
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- According to International Data Corp., foreign workers
performed about 5 percent of information technology services for American
companies in 2003, but will grow share to 23 percent by 2007.
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