- NEW YORK (Reuters) - U.S.
corporations are picking up the pace in shifting well-paid technology jobs
to India, China and other low-cost centers, but they are keeping quiet
for fear of a backlash, industry professionals said.
-
- Morgan Stanley estimates the number of U.S. jobs outsourced
to India will double to about 150,000 in the next three years. Analysts
predict as many as two million U.S. white-collar jobs such as programmers,
software engineers and applications designers will shift to low cost centers
by 2014.
-
- But the biggest companies looking to "offshoring"
to cut costs, such as Microsoft Corp. (MSFT.O: Quote, Profile, Research)
, International Business Machines Corp. (IBM.N: Quote, Profile, Research)
and AT&T Wireless (AWE.N: Quote, Profile, Research) , are reluctant
to attract attention for political reasons, observers said this week.
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- "The problem is that companies aren't sure if it's
politically correct to talk about it," said Jack Trout, a principal
of Trout & Partners, a marketing and strategy firm. "Nobody has
come up with a way to spin it in a positive way."
-
- This causes a problem for publicly traded companies,
which would ordinarily brag about cost savings to investors. Instead, they
send vague signals that they are opening up operations in India and China,
but often decline to elaborate.
-
- Moreover, on the threshold of a U.S. presidential election
year, job losses are a hot button issue. A company that highlighted a major
job transfer could wind up in the campaign debate.
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- Multinationals find that when they trumpet expansion
overseas, they cause problems at home. When Accenture Ltd. (ACN.N: Quote,
Profile, Research) executives in India this month announced plans to double
their staff to 10,000 next year, they triggered a flood of calls to the
company's U.S. offices about U.S. job losses.
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- Offshoring companies "are paying Chinese wages and
selling at U.S. prices," said Alan Tonelson, of the U.S. Business
and Industrial Council, a trade group for small business. "They're
not creating better living standards for America."
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- The U.S. sales director for one of India's top computer
services providers said his company has won business from customers such
as Walt Disney Co. (DIS.N: Quote, Profile, Research) , Time Warner Inc.'s
(THA.N: Quote, Profile, Research) CNN and the Fox division of News Corp.
(NCP.AX: Quote, Profile, Research) -- none of which want public disclosure.
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- In India, some technology companies have recently adopted
lower profiles. Microsoft Corp. (MSFT.O: Quote, Profile, Research) has
been removing its name from minibuses used to ferry engineers on overnight
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- shifts. Major Indian beneficiaries of U.S. business such
as Infosys Technologies Ltd. (INFY.BO: Quote, Profile, Research) , Wipro
Ltd. (WIPR.BO: Quote, Profile, Research) and Satyam Computer Services Ltd.
have stopped identifying new customers.
- While there have been reports that IBM intends to ship
4,700 high-end jobs to India and China next year, they mark a rare instance
when figures "have been reported in black and white," said Linda
Guyer, president of Alliance@IBM, a union that has tried to organize IBM
employees.
- Those numbers were not released by IBM, but rather disclosed
by the Wall Street Journal, which had obtained an internal memo. The company
has declined to comment.
-
- Guyer believes as many as 40,000 of IBM's 160,000 U.S.
jobs will be transferred overseas by 2005, a figure she says was gathered
from phone calls by IBM employees.
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- Previously, IBM has pointed to a report by the McKinsey
Global Institute that concludes the U.S. economy ultimately will benefit.
The report was commissioned by Nasscom, a group made up of Indian tech
companies as well as IBM's Indian services unit -- showing an effort by
those invested in offshoring to sway public opinion.
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- Recently, AT&T Wireless told the U.S. Securities
& Exchange Commission that it would lay off 1,900 employees this year.
Communications Workers of America members obtained an internal memo prepared
by Tata Consultancy Services of India that discussed how it would assume
those U.S. jobs.
-
- Subsequently, AT&T Wireless officials acknowledged
it was exploring the job shifts but didn't offer details.
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- While some companies, such as Electronic Data Systems
Corp. (EDS.N: Quote, Profile, Research) , CAP Gemini Ernst & Young
and Sapient Corp. (SAPE.O: Quote, Profile, Research) , acknowledge they
shift jobs abroad to exploit cost advantages and around-the-clock work,
IBM asserts that it is not moving jobs but creating new ones.
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- "It's a business strategy, period. You cut costs.
You revamp. You look at what your mission statement says and try to turn
a profit," said Sylvia Thomas, who was laid off by chipmaker Agere
Systems Inc. (AGRa.N: Quote, Profile, Research) after declining offers
to relocate to headquarters in Allentown, Pennsylvania -- or to Singapore.
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