HP to move from Australia to India

Date: Tuesday, February 25, 2003 6:18 PM

H-1B and JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

http://www.zdnetindia.com/news/national/stories/76611.html

HP silent on India helpdesk outsource allegation

Andrew Colley, ZDNet Australia,
February 24, 2003

Hewlett-Packard today declined to comment on industry speculation the
company plans to outsource the jobs of an estimated 500 staff working
in its support and service operation located in Rhodes, Sydney,
offshore.

A well-placed source has told ZDNet Australia that HP has given the
project management team overseeing the Rhodes operation a maximum of
eight months to migrate its internal and corporate desktop support
functions, employing 300 people, to Bangalore, India.

The source also claimed that HP was planning to axe a further 200 jobs
at the Rhodes facility by outsourcing its operations management centre
functions to China.
ZDNet Australia contacted HP contacted several times for comment on the
allegation. HP corporate communications manager, Hugh Scott said the
company could only provide a "no comment" response at this stage.

The centre has been operating in Australia for four years. Work to
establish the centre began in 1998 and it started operating in 1999. In
2000 it was upgraded.

The centre currently serves HP's key corporate clients such as Vodafone
and Optus, and its internal staff.

The source claims the outsourcing deal is an example of the
cost-cutting mentality that has dominated the company's strategy under
the stewardship of Carly Fiorina.

"The problem I see with all of this is that Australia is gradually
making other countries rich, these 300 people will go on the dole
because there is no other work around," said the source.

"The corporate giants are paying HP, HP is paying India but there's no
money coming into Australia. Its all money flowing out and you've got
300 more people sitting on the [labour] market".

Last week a McKinsey & Co released a report forecasting IT-enabled
Services-Business Process Outsourcing (ITeS-BPO) would grow 60 percent
to US$2.4 billion over the 2003 fiscal year.

A swathe of the IT industry's heavy-hitters including Dell, IBM,
Accenture and Compaq have outsourced their functions to Indian-based
operations over the last 12 months. Australia has not been immune to
trend.

Last August Compaq moved its research and development centre from
Queensland to India.

In November, documents leaked from within Qantas revealed that the
airline's chief information officer, Fiona Balfour, told a meeting of
ranking IT executives that outsourcing to India was a long-term
strategy for survival.

In December 2001, the Department of Foreign Affairs and Trade alarmed
the Australian IT industry when it was revealed that it had engaged
activity widely viewed as encouraging Australian business to seek
opportunities to cut-costs by transferring local functions to India.

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