12 Articles and 7 Videos on Outsourcing
12 Articles and 7 Videos on Outsourcing
Date: Friday, September 01, 2006 5:50 PM
<<<<< JOB DESTRUCTION NEWSLETTER No. 1548 -- 09/01/2006 >>>>>
<<< COMMENTS FROM ROB >>>
Finally we have an article with some advice on how to avoid being
outsourced (article #4). All you need to do is to become a VERSATILIST! In
case you are one of those specialized programmers or engineers who has
never heard of a versatilist, they were nice enough to explain it - you
need to have "multiple domains of expertise":
A versatilist is a multi-skilled tech professional. A versatilist
starts with a strong depth of knowledge in one area, like
application development or IT financial planning. "They then
broaden their expertise, their track record, their recognition and
their experience over time so that they stretch into multiple
domains of expertise."
We have all been told that the reason companies have to offshore jobs is
that Americans just don't have the high-tech educations to compete in the
global economy. Making matters worse is that our lazy kids aren't getting
advanced degrees in science and engineering.
One of the largest outsourcing companies is Infosys in India. Infosys is a
classic bodyshop. It seems as though Infosys is OK with using liberal arts
grads to do their programming (Article 11), and they are even sending them
here on H-1B and L-1 visas to take all those Computer IT jobs that
Americans just can't do. Isn't it odd that Americans with college degrees
in engineering and science aren't qualified for IT jobs, while Indians with
no programming experience are OK as long as they can think logically? How
does that work?
"When I met Infosys officials, they said that an arts background
was not a problem. The main requirement was the willingness to
learn, handle challenges, think logically and solve problems.
The rest could be trained,"
<<< END OF COMMENTS >>>
Article 1.
http://www.usatoday.com/money/media/2006-08-28-tribune-cuts_x.htm?csp=26
Tribune outsourcing customer service, cutting 250 jobs
Tribune (TRB), which owns daily newspapers in 10 cities, said Monday it is
eliminating 250 jobs at its circulation call centers and outsourcing the
operation to the Philippines.
Article 2:
http://www.eetimes.com/news/semi/showArticle.jhtml?articleID=192300308
Offshoring data to get recrunchedThe Commerce study, which was suppressed
for two years by the Bush Administration, concluded that contrary to U.S.
industry claims, design-engineering jobs are being shipped to locations
like India, primarily to save on labor costs at home. It found that foreign
engineers "are not, for the most part, working on country-specific
applications, working for Indian clients, working with clients in the same
time zone or engaged in 24/7 design."
Article 3:
http://www.eet.com/news/latest/showArticle.jhtml?articleID=192203276
AMD opens second China R&D center
SHANGHAI, China AMD is opening an R&D center here to be closer to its
notebook PC clients, most of which are in the region surrounding the city.
The $16 million center's main duties will be development, validation and
testing of mobile platforms.
Article 4:
http://itmanagement.earthweb.com/career/article.php/3629041
How to Survive the Outsourcing Boom
Its something almost every IT professional worries about: will my job be
outsourced? That's a valid worry. Undoubtedly, outsourcing is here to stay.
Year after year, jobs migrate offshore, forcing American IT workers to
scramble for new positions.
Article 5:
http://www.personneltoday.com/Articles/2006/08/25/36969/Unemployment+and+offshoring+reportedly+prompts+DTI+rethink+on.htm
Unemployment and offshoring reportedly prompts DTI rethink on globalisation
The Department of Trade and Industry (DTI) is reportedly reconsidering the
government's position on globalisation as unemployment continues to rise
and more industries become vulnerable to offshoring
Article 6:
http://www.hindu.com/thehindu/holnus/002200607301111.htm
Offshoring of new kind; Nasdaq rings India for opening bell
The India offshoring story has assumed a whole new dimension with an
altogether different type of work being moved to the country's shores from
the US -- that of ringing the "Opening Bell" of Nasdaq Stock Exchange. IT
major Infosys will do the honours from its Mysore campus tomorrow, becoming
the first ever Indian company to ring the opening bell from a remote
location with a click on a replica of Nasdaq electronic sign-in screen
installed particularly for the occasion.
Article 7:
URL:
http://www.globalservicesmedia.com/sections/news/showArticle.jhtml?articleId=192202257
Legal Process Offshoring to India Potentially Valued at $4.7 Billion by
2011
But the service providers need to hire 33,000 lawyers to be able to do that
by Global Services Global Services
Indian law firms can potentially earn up to $4.7 billion in revenues by
2011, by leveraging the offshore legal-process outsourcing model to provide
legal and paralegal services to U.S. law firms and corporations, Indian
news agency, Press Trust of India (PTI), said quoting a new research
report.
Article 8:
http://www.dallasnews.com/sharedcontent/dws/bus/stories/0822dnbuseds.2ca55d3.html
EDS' speedy growth overseas offsetting layoffs
When Electronic Data Systems Corp. announced up to 20,000 layoffs in 2004,
it had about 120,000 workers. That's roughly the same total it has today,
with the layoffs more than halfway complete. The Plano-based computer
services firm has been hiring as rapidly as it has been firing, filling up
office complexes in India and China while it lays off workers in more
expensive locales such as the U.S. and Western Europe. (Also a Letter to
Editor included).
Article 9:
http://www.stltoday.com/stltoday/business/stories.nsf/0/30527315672638FE862571B100131C29?OpenDocument
employment Unisys Corp. adds 1,900 more to its layoff list
Meanwhile, Unisys is beefing up its operations in countries where labor is
less expensive, such as India, China, Hungary and other central- and
eastern-European countries.
Article 10:
http://www.informationweek.com/news/showArticle.jhtml?articleID=191900148
CSC To Cut 1,800 Domestic Jobs, Add 2,000 Offshore Workers
Computer Sciences Corp., the nation's third-largest outsourcer, says it
plans to cut 1,800 jobs in North America by 2008. At the same time, the
company will hire an almost equal number of workers in low-wage countries
like India over the same period.
Article 11
http://www.dnaindia.com/report.asp?NewsID=1044744
Infy hires in US, trains in India
Alexis Elaine Heintz is a liberal arts student. In six months, she will be
ready to write software codes.
The transformation for this 21-year old graduate in international studies
to a code jockey is underway in Mysore, at the sprawling campus of software
major Infosys.
Article 12:
http://www.ft.com/home/us
GE to shift output from US
General Electric will make the majority of its products outside the US
within three years, marking an historic shift in the global industrial base
towards low-cost, fast-growing developing markets such as China and India.
***** Videos *****
Buger King Outsources
http://www.youtube.com/watch?v=YR_-aMVQWZI
Here is a spoof of Microsoft offshoring of tech support
http://www.youtube.com/watch?v=A-u9B6nouBo
Simpsons Outsourcing
http://www.youtube.com/watch?v=lKI-GzlDRqw
EDI Outsourcing for your business
(unfortunately I think this was a real advertisement)
http://www.youtube.com/watch?v=nSkC-abeB88
Think Again - Outsourcing
http://www.youtube.com/watch?v=gQAovWgYjt8
Mind of Mancia
http://www.youtube.com/watch?v=FWZB0RPNTlI
Lego Man's Blues
http://www.youtube.com/watch?v=I1xRyAVC1hs
1. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.usatoday.com/money/media/2006-08-28-tribune-cuts_x.htm?csp=26
Tribune outsourcing customer service, cutting 250 jobs
Updated 8/28/2006 1:28 PM ET
CHICAGO (AP) Tribune (TRB), which owns daily newspapers in 10 cities, said
Monday it is eliminating 250 jobs at its circulation call centers and
outsourcing the operation to the Philippines.
The cost-saving move was announced internally at Tribune papers at the end
of last week.
Tribune spokesman Jeff Reiter confirmed that calls about circulation and
delivery will be shifted to APAC Customer Services (APAC), which has
operations in the Philippines. He said 120 full-time and 130 part-time
jobs, or about 1% of Tribune's publishing operations, will be cut when the
shift is made starting this fall and into 2007.
"It does two things," Reiter said. "We think it will improve our customer
service for our newspaper readers, and secondly it will make our newspapers
more cost-efficient."
Executives at Tribune newspapers said in disclosing the move to employees
that the move will enable customer service to operate with extended hours,
which should improve quality. The Los Angeles Times, Tribune's largest
daily, has been outsourcing the service since 1998.
Tribune's other papers include the Chicago Tribune, Newsday, The Baltimore
Sun and the Orlando Sentinel.
The action is part of the $200 million in planned cost-savings moves
Tribune announced in May. The circulation service change, coupled with
common systems for advertising and editorial will save about $40 million
combined, Reiter said.
2. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.eetimes.com/news/semi/showArticle.jhtml?articleID=192300308
Offshoring data to get recrunched
George Leopold
(08/25/2006 3:00 PM EDT)
URL: http://www.eetimes.com/showArticle.jhtml?articleID=192300308
WASHINGTON The government's examination of offshoring has been
outsourced.
An obscure quasi-governmental agency called the National Academy of Public
Administration is following up on key conclusions of a July 2004 study by
the Commerce Department's Technology Administration on the offshoring of
high-tech jobs. An academy panel will drill down into government labor
statistics in an attempt to document the extent and impact of shipping more
U.S. high-tech jobs to overseas design centers in India, China and other
low-cost locations.
The panel is examining "how adequate the currently available data are,"
said project director Kenneth Ryder. Preliminary conclusions from its
two-year study are expected to be released in late September. The final
report could be ready as early as the end of the year.
The offshoring panel wants to create a framework for using what Ryder
called "micro-level data" collected by government agencies like the Bureau
of Labor Statistics and the Bureau of Economic Analysis. U.S. labor
statistics that would shed light on the breadth of high-tech offshoring are
often confidential, and Ryder said no framework exists for sharing
multiagency data.
One result of the panel's work could be a memorandum of understanding among
government agencies for sharing U.S. labor statistics on offshoring and
outsourcing. That data could then be used to develop a government response
to the alarming increase in the number of high-tech jobs being shipped
overseas, observers said.
The Commerce study, which was suppressed for two years by the Bush
Administration, concluded that contrary to U.S. industry claims,
design-engineering jobs are being shipped to locations like India,
primarily to save on labor costs at home. It found that foreign engineers
"are not, for the most part, working on country-specific applications,
working for Indian clients, working with clients in the same time zone or
engaged in 24/7 design."
The congressionally mandated report, which was finally released earlier
this year, also found that additional data is needed from government and
industry sources to document the offshoring of high-tech jobs.
Commerce Department officials declined to comment on the offshoring report.
A spokeswoman said only that the 2004 Technology Administration study was
the department's sole "official assessment" and that no further study was
planned.
The Commerce study examined the globalization of U.S. IT services and
software, pharmaceuticals and semiconductors. Laureen Daly, the government
analyst who wrote the semiconductor section, referred questions to the
department's public affairs office.
The National Academy of Public Administration, or NAPA, bills itself as an
honest, independent broker on controversial political issues. Based here,
the nonprofit corporation was chartered by Congress in 1984 to advise
government agencies on "issues of governance and public management."
While the White House suppressed the 2004 Commerce study's results,
Congress appropriated funding in fiscal 2005 for NAPA to conduct a
comprehensive, two-year study of offshoring. In awarding a grant through
the Commerce Department, Congress directed the academy to define job
offshoring; examine current data and determine what additional data is
needed to document offshoring; and analyze the factors accounting for
offshoring, along with its impact on U.S. workers, industry and schools.
The first portion of the three-part NAPA study was finished in January.
Ryder said the NAPA panel is preparing to circulate the second installment
to government agencies for comment prior to release of the section next
month. One topic to be addressed in a final report is the reasons U.S.
high-tech companies offshore or outsource work.
Previous government studies have concluded that high-tech companies are
breaking down their business processes as the pace of globalization
quickens. For the U.S. semiconductor industry, the result has been the
outsourcing or offshoring of functions like chip design, production and
R&D.
Ryder said multinational corporations are expanding their overseas
operations faster than their U.S. facilities. "The economic impacts are
different," he said, citing moves like Advanced Micro Devices Inc.'s
announcement last week that it will establish a second Chinese R&D center
in Shanghai. The Shanghai-Suzhou region produces more than two-thirds of
the world's notebook PCs. AMD is attempting to meet foreign demand for its
processors with a foreign affiliate, Ryder said.
3. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.eet.com/news/latest/showArticle.jhtml?articleID=192203276
AMD opens second China R&D center
Mike Clendenin
(08/23/2006 9:12 AM EDT)
URL: http://www.eetimes.com/showArticle.jhtml?articleID=192203276
SHANGHAI, China AMD is opening an R&D center here to be closer to its
notebook PC clients, most of which are in the region surrounding the city.
The $16 million center's main duties will be development, validation and
testing of mobile platforms. It will initially employ about 100 engineers,
but the company plans to ramp that up to about 400 engineers within a few
years -- making it the largest systems design hub outside of the U.S.
AMD also has a R&D facility in Beijing, as well as a $50 million packaging
plant in Suzhou, about an hour from Shanghai. Locating the center in the
Shanghai-Suzhou region is significant because more than two-thirds of the
world's notebooks are made here, mostly by Taiwanese contract manufactures.
The move to locate here is also a minor blow to Taiwanese efforts to
attract more R&D centers to the island. But with more production moving to
China, many companies believe traveling to Taiwan is an inconvenience,
especially since it takes several hours from Shanghai because of no direct
air links between the political and military enemies.
As in other markets, AMD is trying to aggressively build up market share in
China, courting OEMs such as Lenovo Group Ltd. and Beijing Tongfang.
Putting a design and support center here will likely help them rack up more
design wins as well as benefit from lower cost engineers.
4. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://itmanagement.earthweb.com/career/article.php/3629041
How to Survive the Outsourcing Boom
August 29, 2006
By James Maguire
Its something almost every IT professional worries about: will my job be
outsourced?
That's a valid worry. Undoubtedly, outsourcing is here to stay. Year after
year, jobs migrate offshore, forcing American IT workers to scramble for
new positions.
In the past, companies use to agonize over outsourcing, says Gartner
analyst Diane Morello. But not anymore.
"Now, when I talk to companies, it is assumed that outsourcing and offshore
outsourcing are at least candidates for their sourcing portfolio," she
tells Datamation. "There is much less dismay and horror."
The trend toward outsourcing waxes and wanes. If youre a tech
professional wishing that outsourcing would dry up and blow away (before
your job does) there might a glimmer of hope.
"I have seen a little bit of a move away from outsourcing," says Yankee
Group analyst Zeus Kerravala. "I think we went whole hog one way on the
pendulum toward outsourcing, and I think theres a certain balance."
Yet whether companies will actually find that balance is unclear, he tells
Datamation.
IDC analyst Steve Minton concurs that the trend toward outsourcing isnt
as explosive as it was two or three years ago. However, "Its one of the
fastest growing sectors when you compare it to other areas of the tech
industry overall."
Okay, so maybe the glimmer of hope is pretty dim. Then what, in the face of
a constant threat from outsourcing, is an IT professional to do?
The Versatilist
For IT workers, an effective way to battle the threat of outsourcing is to
be a "versatilist," says Gartners Morello.
A versatilist is a multi-skilled tech professional. A versatilist starts
with a strong depth of knowledge in one area, like application development
or IT financial planning. "They then broaden their expertise, their track
record, their recognition and their experience over time so that they
stretch into multiple domains of expertise," she says.
This individual is in sharp contrast with "the average technical
specialist, whos fairly deep but narrow."
A versatilist can handle responsibilities across a couple (or even several)
different departments. The skill set combination that's most sought after
is -- not surprisingly -- IT and business.
"Firms are looking for people who can come in and be successful business
analysts -- maybe people whove done it elsewhere," Morello says. This
same in-demand quality is also true of business relationship managers.
The job title business analyst may seem far a field from IT. However,
this is now very much part of what IT departments are held accountable for,
however separate it is from deep technical skills.
When Morello talks with CIOs and IT leaders, she finds them to be
struggling to find tech staffers "who are business savvy, who can really
communicate and be fluent in business and technology issues, and who can
raise the bar for the organization overall."
An Agile Workforce
For CIOs, a versatilist offers a tantalizing possibility. "CIOs like them
because when they look at their organization to figure out, Do I have an
agile workforce, can I move my people around easily?' Versatilists give
them a bit more flexibility than specialists do."
In todays IT department, perhaps 10 percent of staffers might be
versatilists. If that number were to increase to 30 or 40 percent, that
organization would have the broad-based knowledge to respond to market
conditions far faster than its competitors.
Clearly, the concept of the versatilist has its limits. IT firms will
always need experienced specialists. In particular, network engineers are
hot right now, as are project managers. (Then again, a good project manager
is really a versatilist.)
So the hopes that CIOs have of a deep bench of versatilists might be just
pipe dreams at this point. "Theres a disconnect between what CIOs say
their organization will look like in the future, and what their hiring
managers are accountable for getting today," Morello says.
Value That Cant Be Transferred
Unfortunately, IT professionals arent always allowed the latitude to
grow within an organization. If youre a specialist who wants to expand
into another area, youre seldom allowed to do so -- your firm needs your
full attention on your niche area.
However, "The versatilist can look like many things," Morello says. While a
combination of business and tech is one excellent choice, there are other
versatile skill sets a tech professional can acquire to be more marketable.
No matter what specific skills he or she has, the versatilist is:
Tapped into multiple knowledge networks
Tapped into multiple social networks
Able to offer value that cannot be easily commoditized and transferred
Often, this special value comes from excelling at face-to-face
interactions, Morello notes. Also indispensable are staffers who work
directly with interpretation of business or consumer requirements. "Those
are the ones whose positions and roles may be secured longer than others."
The key word here is interpretation. The versatilist is able to understand
and synthesize trends from many industries.
"Its what I would call contextually connected. Its the people
who are deeply tapped into the context of the business and industry and the
requirements that are going on there."
5. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.personneltoday.com/Articles/2006/08/25/36969/Unemployment+and+offshoring+reportedly+prompts+DTI+rethink+on.htm
Unemployment and offshoring reportedly prompts DTI rethink on globalisation
25 August 2006 12:16
The Department of Trade and Industry (DTI) is reportedly reconsidering the
government's position on globalisation as unemployment continues to rise
and more industries become vulnerable to offshoring
Sources at the DTI told the Daily Telegraph that civil servants were
focusing on the growing number of service sector jobs being lost in Britain
due to competition from low-wage economies in India and China.
Present government policy, formed only two years ago, dictates that
offshoring leads to a better deal for consumers, competitive advantage for
British companies who can then invest in employment at home, and greater
profits for shareholders. This in turn should encourage more people to
invest in British companies.
The World Bank and International Labour Organisation has estimated that up
to 16% of jobs in the service sector could move to low-wage economies.
A DTI study of the IT industry in June found that in theory, at least 70%
of its 249,000 jobs could go abroad. The fear is that this trend could
spread to other skilled professions.
"If you have got thousands of Indian graduates in UK law and they are
offering their services via high-speed links, it may have implications for
the UK economy," a source told the Daily Telegraph.
At a recent meeting at the CBI to discuss UK skills levels, Alan Wood, CEO
of electronics giant Siemens, told Personnel Today that when it came to
being competitive, British companies "can't afford to allow loyalties to a
particular country to drive us".
The DTI has denied that there is any such review of its policy towards
globalisation.
Michael Millar (About this Author)
6. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.hindu.com/thehindu/holnus/002200607301111.htm
Offshoring of new kind; Nasdaq rings India for opening bell
Mysore, July 30. (PTI): The India offshoring story has assumed a whole new
dimension with an altogether different type of work being moved to the
country's shores from the US -- that of ringing the "Opening Bell" of
Nasdaq Stock Exchange.
IT major Infosys will do the honours from its Mysore campus tomorrow,
becoming the first ever Indian company to ring the opening bell from a
remote location with a click on a replica of Nasdaq electronic sign-in
screen installed particularly for the occasion.
Nasdaq had held its its first remote opening and closing bell ceremonies in
in August 2005 from Cisco Systems' headquarters in San Jose, to celebrate
the company's 20th anniversary. However, it was from a remote site in the
US itself and the the first remote opening bell outside the US was held in
December 2005 from London to kick off Nasdaq's 16th Investor Conference.
The first such event to he held in India, which coincides with Infosys'
25th anniversay celebrations, would be witnessed worldwide including the
Nasdaq stock exchange where it would be broadcast live.
Nasdaq already has its liaison office in India, which was set up way back
in 2001 at Bangalore as part of its global expansion efforts.
The opening bell ceremony, which marks the beginning of the day's trading
session, in Mysore could well pave the way for an all new trend and more
such events of its kind in India, as remote-sounding of the gong has become
just a click away in today's technology-networked world.
However, this is a two-way phenomenon as the upcoming event comes close on
the heels of yet another bell-ringing ceremony in the US, when the CEO of
India-based BPO major WNS, Neeraj Bhargava, sounded the opening gong at New
York Stock Exchange to celebrate the company's listing there.
Incidentally, WNS is not listed on the domestic bourses and has become the
first India-based pure play BPO company to list in the US. Besides,
India-based Sify and Rediff.com are also listed on the US stock exchanges,
though they are not listed here.
Still, the ringing of the opening or closing bells of Nasdaq from a remote
place by an Indian company marks a change from previous such events when an
Indian company has got the honours to start the trading session. Prior to
WNS CEO, the feat has been shared by the likes of Ratan Tata of corporate
behemoth Tata group, Azim Premji of Wipro and Narendra Patni of Patni
Computer Systems.
Ratan Tata has rung the opening bell twice at NYSE -- first to mark the
listing of Tata Motors and then to mark the fifth anniversary of VSNL's
listing there. Premji had rung the closing bell at NYSE in February 2005.
The bell ringing ceremony has also caught up well in India, but it is a
rather new phenomenon here and has been inspired from the NYSE in the US,
where it is common for business chiefs to ring the opening bell to mark the
listing of their companies' shares.
The club of bell ringers on domestic stock exchanges includes business
barons like Mukesh Ambani, Anil Ambani and Sunil Mittal.
NYSE CEO John Thain had commented during Prime Minister Manmohan Singh's
visit to the NYSE in 2004, the first such by an Indian PM, that "There is a
growing recognition in the US that India stands on the threshold of
tremendous growth and influence as an economic power in the global
community."
Thain said while welcoming the Indian PM, "Your economic policies favouring
freer markets, development of infrastructure, prudent spending and a
commitment to education will further India's position of leadership."
He went on to add that the US and Indian entrepreneurs are creating a
natural platform for the two economies to interact more closely, adding
that the NYSE plays a role in this interaction through the listing and
trading of Indian companies at NYSE.
Manmohan Singh had said during his visit, "No power on earth can stop an
idea whose time has come. The emergence of India as a major powerhouse of
the global economy happens to be one such idea whose time has come."
7. +++++++++++++++++++++++++++++++++++++++++++++++++++
August 21, 2006
URL:
http://www.globalservicesmedia.com/sections/news/showArticle.jhtml?articleId=192202257
Legal Process Offshoring to India Potentially Valued at $4.7 Billion by
2011
But the service providers need to hire 33,000 lawyers to be able to do that
by Global Services Global Services
Indian law firms can potentially earn up to $4.7 billion in revenues by
2011, by leveraging the offshore legal-process outsourcing model to provide
legal and paralegal services to U.S. law firms and corporations, Indian
news agency, Press Trust of India (PTI), said quoting a new research
report.
The Indian firms must tap U.S. mid-sized or large law firms in the first
phase before they target corporations, according to a research report
published by Crisil Research, a research arm of Indian stock-rating agency
Crisil. U.S.- and U.K-based law firms like Milbank, Tweed, Hadley & McCloy,
Baker & McKenzie, Allen & Overy, Schwegman, Lundberg, Woessner and Kluth,
Kelley Drye & Warren, Eversheds, Hammonds Direct and Bickel & Brewer are
some of the law firms who have offshored to India. The outsourcing service
providers would need to add 33,000 lawyers to achieve this revenue,
predicts the report.
In a study of the state of the legal-process offshoring industry, Legal
Services - The Mass Piloting Stage, in May 2006, Global Services estimated
the total size of the legal offshore services industry in India to be of
$60-$70 million, employing about 1200 people. The report concluded that
while as many as 200 odd law firms are trying out the model only a handful
of them, numbering less than 5-6, have significant scale of operations.
8. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.dallasnews.com/sharedcontent/dws/bus/stories/0822dnbuseds.2ca55d3.html
EDS' speedy growth overseas offsetting layoffs
11:04 PM CDT on Tuesday, August 22, 2006
By CRAYTON HARRISON / The Dallas Morning News
When Electronic Data Systems Corp. announced up to 20,000 layoffs in 2004,
it had about 120,000 workers. That's roughly the same total it has today,
with the layoffs more than halfway complete.
How did that happen?
The Plano-based computer services firm has been hiring as rapidly as it has
been firing, filling up office complexes in India and China while it lays
off workers in more expensive locales such as the U.S. and Western Europe.
MICHAEL HOGUE/DMN In North Texas, EDS has about 7,400 workers, down from
7,700 in 2004.
Offshore outsourcing is old news, but the sheer speed of EDS' conversion
into a truly global workforce is mind-boggling.
By 2008, EDS expects to have tripled its offshore labor force to about
45,000 while keeping its overall head count about even, all in the span of
about three years.
Executives feel they have to move so quickly because customers want to take
advantage of the lower cost of offshore labor.
But hiring so many so quickly, while still trying to choose quality people,
is a daunting task.
"It's a global world, and we're playing in it," said Steve Heidt, an EDS
vice president.
EDS certainly isn't alone in its push offshore.
Its top rival, IBM Corp., has increased staff in India to 43,000 from 9,000
in the last three years, thanks in part to an acquisition. Accenture Ltd.,
Hewlett-Packard Co. and others are building up a presence in India and
elsewhere.
EDS' moves have an added degree of difficulty, having begun during the
company's turnaround process.
In 2002, the company was in a tough situation, having trouble landing
contracts while inching precariously close to a liquidity crisis.
Chief executive Michael H. Jordan took over in 2003 and announced mass
layoffs soon after.
Acquisitions, too
The grand march offshore involves plenty of hiring, but acquisitions will
also add to the total.
This year, EDS bought a majority stake in Indian firm Mphasis BFL Ltd.,
which has about 12,000 employees.
EDS is merging Mphasis with its own Indian operations and expects to have
about 20,000 Indian employees by the end of the year. (EDS does not yet
include Mphasis employees in its total head count.)
In China, EDS expects to have 1,000 employees by the end of the year, up
from about 100 today.
The Chinese head count could grow to about 2,000 by the end of 2007.
The company is also planning major service centers in Latin America and
Eastern Europe, which both offer low-cost labor and a variety of languages
to serve clients with international operations.
Electronic Data Systems operates an office in Hungary. Eastern Europe
offers low-cost workers who speak a variety of languages, allowing them to
serve international clients. EDS has had offices all over the world for
decades.
It had a particularly rapid international expansion under former parent
company General Motors Corp.
But the most recent moves are distinctly different.
In the past, after winning a contract, EDS would often take over technology
operations in the new client's international locations.
Now the company is building large campuses in such strategic locations as
India and China and offering those locations' services to clients.
"A decade ago, we used to treat this with our client as an option," Mr.
Heidt said.
Nowadays, EDS includes its offshore services in most contract bids unless
clients specify otherwise.
Clients simply expect contract bidders to use offshore labor and pass along
the savings.
Cooling potato
"The marketplace has generally accepted the notion of offshore labor being
competent," said Todd Furniss, chief operating officer of the Everest
Group, a Dallas outsourcing advisory firm.
"It's not nearly the political hot potato it once was."
Some jobs can't go offshore, of course.
Although EDS sends more and more work overseas, it must be careful to
create the right mix of resources in Western countries and developing
nations.
By 2008, EDS expects to have roughly 30 percent to 35 percent of its head
count in offshore locations, up from about 13 percent in 2005.
That number should be about right, considering EDS' main businesses, said
Rod Bourgeois, an analyst with Sanford C. Bernstein.
About 15 percent of EDS' sales come from managing nongovernment clients'
software applications -- a service that can be performed offshore
relatively easily, Mr. Bourgeois said.
Over time, EDS will probably add even more employees offshore as it wins
more contracts for other tasks, such as business process outsourcing, he
said.
Not all offshore
But EDS will still need most of its employees closer to its clients' sites,
Mr. Bourgeois said.
Roughly 60 percent of the company's sales come from running technology
infrastructure for clients, a job that can't easily go offshore.
"For that reason, EDS' offshore head count is not going to go sky-high,"
Mr. Bourgeois said.
Getting to an offshore head count of 45,000 is difficult enough as it is.
The biggest buildup will come in India, where EDS is building two major
service centers in Pune and Chennai. In those cities, it will compete with
other major technology firms for employees.
India has become the top destination for outsourcing firms because its
university system consistently churns out hordes of young workers with
technology expertise and English proficiency.
Wages have begun to rise as employers compete for the best workers, but
labor in India is still far cheaper than it is in developed nations.
Mr. Heidt has a plan to recruit top talent quickly.
It involves a variety of strategies, including print and electronic
campaigns, referral programs and relationships with Indian schools.
He's also working on ways to retain employees in a job market with heavy
turnover.
Concentrating employees in large campuses could help persuade them to stay,
since they can see a wide variety of potential career paths in one
location.
"You can change jobs without leaving the building," Mr. Heidt said.
Hiring the employees is only part of the challenge, said Dean Davison, a
vice president at outsourcing consultancy Nautilus Advisors.
The new workers must also be trained and versed in EDS' culture and
practices.
Getting that many workers hired, trained and working on client engagements
will require a Herculean effort, said Mr. Davison, who left EDS six months
ago after serving as competitive and market intelligence director.
But if Mr. Heidt and EDS can pull it off, potential clients will notice.
"I look forward to them achieving it and making it part of their services
offering," Mr. Furniss said.
"It really should help EDS' competitive position."
E-mail charrison@dallasnews.com
http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-letters_27bus.ART.State.Edition1.31b2e6b.html
Letters: Offshoring jobs, Social Security, income divide
10:34 AM CDT on Sunday, August 27, 2006
Offshoring hits nerves
Re: "Zero-sum job cutting/EDS moves fast to bulk up overseas, offsetting
20,000 layoffs" by Crayton Harrison, Aug. 22 Business section
I wouldn't buy anything that EDS manufactures or sells because of this!
That is what America really wants: poorer citizens, broken marriages, more
foreclosures, a smaller tax base and our children not having a workplace
unless they move to China or India. Yeah, we want our taxes to go higher to
pay for social services so global corporations can save a little money and
their stockholders and CEOs can make a little more money.
Our politicians and corporations have sold out our country for less than 30
pieces of silver. If we aren't making money, we won't be buying anything
either.
Bill Stegman, Dallas
9. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.stltoday.com/stltoday/business/stories.nsf/0/30527315672638FE862571B100131C29?OpenDocument
employment Unisys Corp. adds 1,900 more to its layoff list
THE ASSOCIATED PRESS
Thursday, Jul. 20 2006
Unisys Corp. on Wednesday said it is laying off 1,900 more people, bringing
global job losses to 5,500 since October as the technology services and
computer hardware firm struggles to revamp its business.
The company, based in Blue Bell, Pa., said it would cut 1,900 more jobs in
addition to 3,600 disclosed last October.
The layoffs, constituting about 15 percent of total work force, would save
Unisys at least $325 million annually by the second half of next year.
Meanwhile, Unisys is beefing up its operations in countries where labor is
less
expensive, such as India, China, Hungary and other central- and
eastern-European countries.
Unisys has 1,800 workers in these low-cost countries, most of them in
India.
The company expects to boost its work force in these areas to 6,000 by
2008.
10. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.informationweek.com/news/showArticle.jhtml?articleID=191900148
CSC To Cut 1,800 Domestic Jobs, Add 2,000 Offshore Workers
CSC also says it may close some facilities, according to a Wednesday
regulatory filing by the company.
By Paul McDougall, InformationWeek
Aug. 9, 2006
Computer Sciences Corp., the nation's third-largest outsourcer, says it
plans to cut 1,800 jobs in North America by 2008. At the same time, the
company will hire an almost equal number of workers in low-wage countries
like India over the same period.
CSC also says it may close some facilities, according to a Wednesday
regulatory filing by the company. The document, a full quarterly financial
report filed with the Securities and Exchange Commission, adds details to
restructuring plans previously disclosed by CSC.
In an April 4 announcement, the company said it would cut a total of 5,000
positions worldwide. At the time, CSC said without providing further
details that the "majority of these reductions will occur in Europe."
CSC's shift of high-paying U.S. tech jobs to low-wage offshore centers will
likely draw ire from labor advocates, especially given the fact that the
company holds billions of dollars in federal government tech services
contracts funded by American taxpayers.
However, the move should be welcomed by investors and customers anxious to
see the company reduce operating costs. Last week, CSC reported a first
quarter loss of $55.3 million on revenues of $3.56 billion.
In Wednesday's filing, CSC said it would cut 1,300 North American jobs by
2007 and an additional 500 by 2008. "Partially offsetting these reductions
will be headcount increases in certain lower cost regions," CSC said. It
plans to add 2,000 such positions by 2008.
The vast majority of CSC's North American operations are in the United
States. It also maintains some facilities in Canada. CSC also said it plans
to cut a total of 2,650 jobs in Europe. Its total worldwide workforce
currently stands at about 80,000 employees.
As a result of the restructuring, CSC said it will also likely close some
facilities. The SEC filing did not name specific locations. The company
said it expects the restructuring program to cost a total of $375 million
over two years.
CSC officials were not immediately available for comment.
11. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.dnaindia.com/report.asp?NewsID=1044744
Monday, July 31, 2006 9:50:00 PM
Infy hires in US, trains in India
K Raghu
BANGALORE: Alexis Elaine Heintz is a liberal arts student. In six months,
she will be ready to write software codes.
The transformation for this 21-year old graduate in international studies
to a code jockey is underway in Mysore, at the sprawling campus of software
major Infosys.
Heintz did a major on Latin America, but it was "double opportunity" when
Infosys went to hire people on campus from University of North Carolina.
"It is a opportunity that I could not refuse. The first was working at
Infosys, which had showed concern for society and also working and
travelling around India. It came as a total package," Heintz told DNA
Money.
She will be posted to work at one of the development centres in the US. But
doesnt a person need a background in engineering become a software
programmer.
"When I met Infosys officials, they said that an arts background was not a
problem. The main requirement was the willingness to learn, handle
challenges, think logically and solve problems. The rest could be trained,"
Heintz, who joined the first batch of 126 graduates, from 82 US colleges as
part of the Infosys Global Talent Programme.
If Heintz joined Infosys due to the opportunities in the Indian company,
the plain speak of its chairman and chief mentor N R Narayana Murthy had an
influence on Syed Imran Haider to join the countrys new economy brand.
"A batchmate of mine during the student exchange programme spoke about
Infosys. Murthy had a huge influence in me joining this company," said
Haider, a graduate from the University of Illinois.
Haider and Heintz will join others to get trained in technical and client
facing skills, besides a two months rigorous practice on writing codes in
the six month session in India, before they are deployed on various
projects in the US.
Infosys plans to hire 300 graduates from the US next year and about 25
youngsters from universities in the UK. It would expand the talent search
to other nations including Australia and Thailand to gradually increase the
percentage of foreigners in its 58,000-strong workforce from three at
present and turn it into a multi-ethnic, multi cultural community.
12. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.ft.com/home/us
GE to shift output from US
By Francesco Guerrera in New York
Published: July 27 2006 05:11
General Electric will make the majority of its products outside the US
within three years, marking an historic shift in the global industrial base
towards low-cost, fast-growing developing markets such as China and India.
The move by the conglomerate, which follows similar decisions by
multinationals such as IBM, could reignite the US political backlash
against globalisation, seen by many politicians, trade unionists and
commentators as a threat to domestic prosperity.
GE, whose products range from jet engines to microwave ovens, derives more
than half its $150bn revenues from the rest of the world, but it is still
regarded as a bellwether manufacturer in the US, where it employs more than
160,000 people.
However, the companys plan to increase earnings by at least 10 per cent
every year has prompted Jeffrey Immelt, chief executive, to launch an
overhaul of its business practices aimed at improving margins and reducing
costs.
On Wednesday, GE executives told Wall Street analysts the target increase
in the proportion of non-US production from the current 41 per cent to more
than 50 per cent was dictated by the need to drive higher revenues, lower
costs and be closer to customers.
"We are trying to take advantage of the global factory," Keith Sherin,
finance director, told the Financial Times. "We are a global company; we
should have a supply chain that reflects our customer base."
The shortage of US engineers and their high salaries, coupled with the huge
talent pool in countries such as China and India, have prompted GE to
increase its manufacturing base outside the US by nearly half over the past
three years.
Lloyd Trotter, GEs executive vice-president for operations, said making
GEs products in developing countries yielded an average cost saving of
about 20 per cent.
Skilled staff in India, where the company employs 3,500 engineers, had
helped GE reduce costs by $1.5bn since 2000.
Mr Trotter added that, although some businesses, such as those involving
military technology, could not be moved from the US, others, such as
domestic appliances, were relying heavily on manufacturing in developing
countries.
GE executives said the company was looking to expand beyond China and India
into eastern European countries, and other Asian markets. However, they
warned that Mexico -- a traditional manufacturing location for US industry
-- was rapidly losing its appeal because of rising production costs.
The company reiterated its target of extending margins by 1 per cent each
year between 2007 and 2009 -- an increase that should translate into at
least $1.6bn of additional annual profits.
Last year GE reported net earnings of $16.3bn. Part of the margin
improvement is expected to come from a plan to reduce administrative
expenses by merging the headquarters and back-office functions of the
various businesses.
14. +++++++++++++++++++++++++++++++++++++++++++++++++++
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