Unpatriotic Outsourcing Articles
Unpatriotic Outsourcing Articles
Date: Friday, July 04, 2003 1:24 PM
JOB DESTRUCTION NEWSLETTER
www.ZaZona.com
Article 1:
http://www.computerworld.com/managementtopics/management/outsourcing/story/0,10801,82578,00.html?nas=PM-82578
Offshore outsourcing is relentless
Article 2:
http://tampatrib.com/businessnews/MGA7GMYGFHD.html
Overseas Sites Calling For U.S. Jobs
Article 3:
(no link)
Wall Street to ship research jobs overseas
Article 4:
http://www.siliconvalley.com/mld/siliconvalley/6209151.htm
Microsoft shifting more customer-support jobs to India
Article 5:
http://makeashorterlink.com/?W2DC21525
Soviet technology legacy draws offshore work - Computerworld
The original link wrapped:
http://www.computerworld.com/managementtopics/management/outsourcing/story/0,10801,82761,00.html
Article 6:
http://www.washtech.org/wt/news/industry/display.php?ID_Content=4585
Microsoft plans largest lay-off of full-time employees in company
history
Hundreds of call center jobs to be offshored to India and Canada
Article 7:
http://www.bayarea.com/mld/mercurynews/business/6209151.htm
Microsoft shifting more customer-support jobs to India
Article 8:
http://www.financialexpress.com/fe_full_story.php?content_id=37377
US Biotech Companies Evince Interest In Outsourcing To India
Article 9:
http://www.ctnow.com/business/hc-thehtfd0703.artjul03.story
Hartford Life Sending Some IT Work To India
http://www.computerworld.com/managementtopics/management/outsourcing/story/0,10801,82578,00.html?nas=PM-82578
Offshore outsourcing is relentless
By Patrick Thibodeau
JUNE 27, 2003
LOS ANGELES -- Offshore outsourcing is so mainstream that by next
year, more than 80% of U.S. companies will have had high-level
discussions about the topic. And 40% will have completed some kind of
pilot program or will be using near-shore or offshore services.
Despite that assessment, made by Gartner Inc. at an outsourcing
conference here last week, offshore outsourcing remains a difficult
issue for executives to talk about. In fact, many attendees were
skittish about responding to questions for this article, except in the
most general terms.
Corporate officials did, however, acknowledge trends related to the
politically charged issue. For instance, BP PLC in London is discussing
offshore work with its existing outsourcers, IBM and Accenture Ltd.
"They are offering us an opportunity to have consistent performance at
a lower cost," said Russell Taruscio, downstream chief financial
officer at the oil company.
Adding offshore components to outsourcing contracts is on the rise,
according to IDC. In a report last week, the Framingham, Mass.,
research firm said offshore outsourcing is the dominant trend in the IT
services industry, with 42% of the application management contracts now
having some offshore component. A big reason is cost.
Bob Walters, IT director at supply chain system provider Intermec
Technologies Corp. in Everett, Wash., surveyed development costs
recently at an SAP AG user conference. He determined that U.S.
companies are charging $80 to $120 per hour for programming work, while
the fee for offshore providers is about $40.
When you can pay a third of the price, offshore is "something that has
to be considered," said Walters.
As offshore business grows, so does competition for it. Pioneering
India-based offshore companies, such as Tata Sons Ltd., are facing
increasing competition from the large U.S. IT consulting firms.
Accenture CEO Joe W. Forehand, who spoke at the Gartner conference,
compared the trend to the previous exodus from the U.S. of many
manufacturing operations. "The way we look at it, the industrialization
of IT is a reality, and we have to embrace that," he said.
Competition is also becoming more global. In the vendor exhibit hall,
Bamboo Networks Ltd.'s mere presence raised eyebrows. Some rivals said
it was the first China-based outsourcer to set up a booth at a U.S.
outsourcing conference.
China is considered something of a sleeping giant in the offshore world
that isn't quite ready to compete with India. China "represents the
next wave" in offshore outsourcing, said Traci Gere, an IDC analyst.
Rajesh Rao, chief operating officer at Hong Kong-based Bamboo, which
operates an offshore development center in Guangzhou, China, said the
company believes it has developed its offshore processes sufficiently
to compete for U.S. customers.
One user of offshore services, Sudhir Agarwal, senior manager of
architecture and services at Verizon Communications in New York, said
India's talent pool, its populace's proficiency with English and the
country's U.S. connections will ensure India a dominant role for years
to come. But China's emergence "is good for companies in the U.S.,"
Agarwal added.
Source: Computerworld
http://tampatrib.com/businessnews/MGA7GMYGFHD.html
Jun 27, 2003
Overseas Sites Calling For U.S. Jobs
By MICHAEL SASSO
msasso@tampatrib.com
BANGALORE, India - Here in India's Silicon Valley, telephone
customer-service jobs pay $174 a month, yet employers are swamped with
applications.
Recently, Sykes Enterprises wanted to beef up its new customer service
center in Bangalore, where English-speaking Indians field questions
from Americans by phone and e-mail.
Tampa-based Sykes placed an ad in The Times of India and on an Internet
job board seeking applicants for 150 new jobs.
It got 6,000 applications.
With that kind of response, Sykes is planning to quadruple its
Bangalore work force within a year while opening overseas call centers
elsewhere. It's following a worldwide trend of moving jobs to
developing nations such as India, China and the Philippines.
``Typically, in an offshore environment, these jobs are considered
premier,'' said Sykes Senior Vice President Gerry Rogers. ``You go
offshore because you get an extremely talented work force at a fraction
of the price.''
In mid-June, a Tampa Tribune reporter toured Sykes' Bangalore
operation. There, some 350 employees answer customer questions by
e-mail for the Internet Service Provider MSN and answer phone calls for
Delta Air Lines.
Some advantages of the operation are:
* Inexpensive labor. The customer service jobs in Bangalore pay about
8,000 Indian rupees a month. At an exchange rate of about 46 rupees per
U.S. dollar, that's $174 a month, or $2,087 a year. The company's
Indian software engineers earn roughly 12,000 rupees per month, about
$261.
By comparison, similar call center jobs in the United States pay $8 to
$12 per hour, or at least $1,400 a month, said Bill Sokol, Sykes'
senior director of strategy and marketing.
The Indian wages are not comparable to American wages, even after
adjusting for the less expensive cost of living in India. For example,
Hillary Clinton's new book, ``Living History,'' has received tremendous
attention in the Indian media. It sells for about 650 rupees in India,
or about $14, nearly double a Sykes customer- service representative's
daily pay.
* Talented employees. In America, people often thumb their noses at
customer-service jobs, and Sykes' employee turnover rate is 80 percent
a year in the United States. In India, call center employees usually
have college degrees and the turnover rate is about 20 percent, Rogers
said.
``In the U.S., people view call centers as an interim job,'' Rogers
said. ``Here, it's considered a career path opportunity.''
* What Rogers calls ``accent neutralization.'' Many American companies
want customer service representatives who speak flawless English with
little or no Indian accent. ``Some clients specify that under no
circumstances do you tell them [customers] where you are,'' Rogers
said.
So, Sykes puts its foreign employees through classes to minimize their
accents and teach them the basics of American culture.
But accents can work in reverse, as well. Though Americans might
struggle to understand Indian call center employees, Texas and New York
accents often give the Indian employees fits, Rogers said.
A unique aspect of doing business in India: Sykes provides door-
to-door transportation for female employees working the night shift,
which is standard practice for Indian high-tech companies, said
Bangalore call center Director Marlene Avila.
``Women working at night was unheard of before the software industry,''
Avila said. ``Girls don't know how to manage this new liberty.''
Sykes chose Bangalore over other major Indian cities including Delhi,
Mumbai (formerly known as Bombay) and Chennai (formerly Madras). Though
infrastructure is relatively poor in India overall, it is better in
Bangalore, a city of more than 4 million people that is known for its
high-tech companies. For example, Intel is across the street from
Sykes, and IBM occupies one of Bangalore's most prominent buildings.
In general, Sykes can hire six software developers in India for every
one it hires in the United States, Rogers said. That doesn't
necessarily mean doing business in India is six times less expensive
than in the United States; because infrastructure is poor, some of
Sykes' overhead costs in India are higher than in America. Plus the
cost of routing calls to India is, of course, higher than domestic
calls. But telecommunication costs have plummeted in the past three
years, making overseas operations more viable, Rogers said.
For example, four years ago, a call from the United States to Costa
Rica (where Sykes has a facility) was $1.25 a minute. Today, it's 26
cents, Rogers said.
``To a call center company, a penny a minute is a huge thing,'' he
said.
Exodus Of Jobs
With all the potential savings, Sykes is expanding its presence
overseas. Today, Sykes has 15 facilities and 6,000 employees in the
United States and 26 facilities and about 10,000 workers abroad in
countries including India, China, the Philippines, Costa Rica, Turkey
and European countries.
This week, Sykes notified officials in tiny Perry County, Ky., that it
would be closing its customer- service center there and shifting the
work to other Sykes facilities, Sykes spokeswoman Andrea Burnett said.
Sykes hopes the closure is temporary. Burnett would not say where
Kentucky work is being shifted or whether any work is being sent
overseas.
In Bangalore, though, Sykes is expecting its work force to go to 1,500
employees from 350 in the next year, Rogers said.
Sykes mirrors other U.S. and Western companies in moving jobs to
developing countries. In November, Forrester Research estimated 3.3
million U.S. jobs would move offshore in the next 15 years. Of those,
nearly 1.7 million will be office jobs, and 472,000 will be
computer-related jobs, Forrester reported.
``The U.S. is a contracting environment for call centers, while it's
almost explosively expanding offshore,'' Rogers said.
A Backlash Back Home
Not surprisingly, Americans are upset about the loss of jobs. State
legislatures in New Jersey, Maryland, Washington, Connecticut and
Missouri are considering laws that would prohibit the outsourcing of
government tech-services contracts to developing countries, according
to a recent report in BusinessWeek.
In mid-June, the leading English-language dailies in India were abuzz
with stories and editorials about the backlash in America against
overseas outsourcing. The editorials suggested outsourcing is good for
America because it keeps American companies competitive on the world
stage.
Florida and the Tampa Bay area could have a lot to lose in coming
years, especially if they start losing white-collar jobs. In
Hillsborough and Pinellas counties, 6,013 people were employed in
telephone call centers in 2001, according to figures provided by the
Hillsborough County Management and Budget Department. Those figures
refer to employees working for companies such as Sykes, which handle
customer service on behalf of clients. They do not include employees of
companies that do their own customer service and telemarketing,
Hillsborough County economist Kevin Brickey said.
But the Florida Legislature probably will not pass protective
legislation any time soon, said Susan MacManus, a political science
professor at the University of South Florida. The Legislature is
dominated by Republicans, who are traditionally big proponents of free
markets.
``In terms of official state policy, it would be a real uphill battle
to get something like that through the state Legislature,'' MacManus
said.
Reporter Michael Sasso can be reached at (813) 259-7865.
Wall Street to ship research jobs overseas
By Jake Keaveny
NEW YORK, May 1 (Reuters) - Wall Street research analysts have suffered
rounds of layoffs, big pay cuts, and accusations that they routinely
lied to
the investing public. Now there's a new worry -- that their jobs are
being
shipped overseas.
Investment banks like Morgan Stanley , Goldman Sachs Group
and
Citigroup Inc. are mulling the benefits of shipping research jobs
to
countries like India, where salaries for business graduates are as
little as
10 percent of those in New York and London.
Morgan Stanley plans to experiment by hiring stock analysts in India to
support its U.S. and European analysts, while Deutsche Bank AG
has contracted Irevna Limited, a London-based consultancy that
specializes
in outsourcing research to India, according to sources familiar with
the
situation.
Last week, J.P. Morgan Chase & Co. said it will hire 40 junior
stock
analysts and other research staffers in its Bombay office this year as
a way
to expand research in a weak market.
"Every bank on Wall Street will eventually use the cost benefits
offshore to
maintain their research businesses," said one executive at a major
investment bank.
Financial services consultants and banking executives say that offshore
operations are part of broader efforts to bankroll research departments
in
the face of shrinking revenue from equities underwriting and trading
businesses and a tighter regulatory environment.
SOPHISTICATED RESEARCH
For now, the idea is for offshore analysts to collect data, do basic
number
crunching and create finance models, while production tasks like
editing can
also be moved abroad. The aim is to inexpensively provide support for
more
senior analysts, who would have more time to finish research reports
and
meet clients.
In time though, offshore hires could translate into fewer research
posts in
the United States and Europe. Once the operations are up and running,
it
will be a natural progression to shift more complicated tasks abroad,
say
financial services consultants.
Wall Street is looking to examples such as General Electric Co. ,
which shifted software development and back office jobs to India under
former Chief Executive Jack Welch. Today, Indian engineers are
contracted
for tasks as sophisticated as analyzing the materials and design of new
jet
engines.
In the research world, consulting firms are leading the way. Firms such
as
McKinsey & Co. and A.T. Kearney Inc. have shifted the bulk of their
research
divisions to such places as Bombay and Chennai, India, keeping U.S. and
European offices staffed mainly with division heads who need to have
regular
contact with clients.
"If GE can do the advanced research over there on its next generation
of jet
engines, then there's no reason why that can't be the same case for
financial institutions," said Stefan Spohr, a principle in Kearney's
financial services division.
The potential opportunities have given rise to a cottage industry of
consultants with Indian connections. Fast-growing firms like Office
Tiger,
Smart Analyst Inc. and Irevna help to provide third-party research out
of
India.
Spokespersons at Merrill Lynch , which has been outsourcing
technology services to India for three years, and Citigroup, which has
offshore operation in India for its commercial bank, said there are
currently no offshore research initiatives.
A spokesman for Goldman Sachs also said it had no plans to hire
offshore
analysts. Spokeswomen at Deutsche Bank and Morgan Stanley had no
comment.
MASSIVE RELOCATION
A report recently completed by Kearney shows that the idea of
relocating
jobs has taken hold.
U.S. banks, brokerages, mutual companies and other financial services
companies are planning to relocate 500,000 jobs offshore, or 8 percent
of
their work force, over the next five years.
So far, research accounts for a small fraction of that, but Andrea
Bierce,
an A.T. Kearney managing director who oversaw the study, said that
financial
analysis and research is fast becoming an offshore favorite.
In a Kearney poll, executives were asked which business processes were
being
shifted abroad. The No. 2 answer was analytical and technical services.
"If it can be done by sitting at a desk in front of a computer, then it
can
be done abroad," said Bierce.
Shifting services offshore is not without its risks. Some executives
have
complained that communications with home offices and cultural
differences
have led to inefficiencies, said consultants.
Another concern in India are the geopolitical tensions with Pakistan
and the
threat of nuclear conflict, said one Wall Street executive.
http://www.siliconvalley.com/mld/siliconvalley/6209151.htm
Posted on Tue, Jul. 01, 2003
Microsoft shifting more customer-support jobs to India
By Kristi Heim
Mercury News Seattle Bureau
SEATTLE - Microsoft plans to shift more of its technical-support jobs
overseas in the next year, acknowledging the move could mean hundreds
of layoffs in three U.S. states.
In April, Microsoft opened a new customer-support center in Bangalore,
India. As it grows, the Bangalore center could take over more of the
customer-service and technical-support work now handled in Issaquah,
Wash.; Charlotte, N.C.; and Las Colinas, Texas, Microsoft acknowledged
Monday.
The company has about 800 full-time employees at each site. It's
unclear how many of those employees would be affected, said Microsoft
spokeswoman Stacy Drake. Microsoft plans to hire 150 employees in
Bangalore over the next fiscal year, which starts today.
Microsoft, like many technology companies, has been shifting
customer-service operations overseas. The company relies on workers in
India to cut labor costs and run an 18-hour worldwide business cycle.
Last July, Microsoft Senior Vice President Brian Valentine gave a
presentation urging managers to begin outsourcing software-development
projects to contractors in India for ``quality work at 50 to 60 percent
of the cost.''
Changing course
The company in January maintained that outsourcing was not intended to
replace jobs in the United States and would not result in layoffs.
``Since that time we have launched this program out of Bangalore. There
may be some impact on U.S. sites. In our business, we're always
evaluating different strategies to improve customer support,'' Drake
said Monday.
Employees in Las Colinas, near Dallas, told the Seattle-based
Washington Alliance of Technology Workers that they have been informed
of the plan by their supervisors and been told to begin looking for new
jobs.
``The managers here are very clear; by the end of fiscal year 2004, our
jobs will all be gone,'' Eric Poore, a Microsoft employee in Las
Colinas who handles technical support for enterprise customers, said in
a statement issued by the union.
The Washington Alliance has started a campaign to stem what it calls
the ``Great Tech Job Exodus,'' urging elected officials to discourage
U.S. technology companies from sending jobs offshore.
The union called this year's plan to move jobs to Bangalore ``the
largest one-time firing of full-time Microsoft employees in the
company's history.''
`Scared people'
``There's a lot of very scared people here,'' said Corey Goode, who was
laid off last week from his contract job as a Microsoft network
administrator in Las Colinas. ``They're letting so many people go. My
boss told me basically if you want to work for Microsoft, you're going
to have to work in India.''
Goode, who has since found work at another company, said he took part
in a conference call earlier this year with Microsoft managers in
Redmond, Wash., during which they discussed the closing of offices in
North Carolina and Texas. ``The layoffs are coming in the next two or
three months in small waves,'' he said.
Last week, Microsoft laid off 161 employees in its nationwide
consulting business, including seven positions in San Francisco. In
that business, Microsoft will continue to focus on designing software
solutions for customers but let partner companies handle the
installation and support.
Contact Kristi Heim at kheim@mercurynews.com or at (206) 632-8160.
http://www.techsunite.org/news/techind/030701_msjobsabroad.cfm
July 1, 2003
Microsoft plans largest lay-off of full-time employees in company
history
Hundreds of call center jobs to be offshored to India and Canada
By Jeff Nachtigal
WashTech News
When Eric Poore began working as a customer service representative for
Microsofts technical call-routing center in 1997, he was told his
advancement opportunities were endless.
Two years into his Microsoft career Poores hard work paid off with
a promotion to Outlook Technical Router, where he managed technical
questions about Microsofts email program. But less than a year
later, the position was outsourced a handy euphemism for being sent to
India or elsewhere to cut labor costs - and he was demoted back to his
original customer service job.
Four years after Poore lost his first position to outsourcing, he is
about to lose his six-year career because Microsoft is in the process
of a massive relocation of Customer Central call center jobs to India
and Canada.
Employees estimate that Microsoft is planning to eliminate at least 800
jobs in the next fiscal year at the company's Las Colinas facility
outside of Dallas, Texas and shift the work offshore.
If this outsourcing goes as expected, it will be the largest one-time
firing of full-time Microsoft employees - in the companys history.
Lori Moore, Vice President of Microsoft Product Support Services (PSS),
visited the Las Colinas site in April for a company-wide meeting to
talk about fiscal year 2004 plans. The message, according to Poore, was
exceedingly clear.
It was an open forum and people were asking about Las Colinas expansion
plans, but Moore was giving us the standard corporate bob-and-weave
answers, clearly giving us the message that there were no plans for
expansion or development of our site. She said that Microsoft would
focus all of its efforts on India to position them for global
expansion, Poore said.
The managers here are very clear - by the end of fiscal year 2004, our
jobs will all be gone, Poore said.
There are over 1,300 Microsoft workers at the Las Colinas, Texas,
Customer Central site, the first contact for help desk phone questions
about Microsoft products, and according to Poore, hundreds of full-time
Microsoft employees may be laid off as Microsoft moves their positions
offshore to India and Nova Scotia, Canada.
In addition, Poore has heard from Las Colinas managers that many more
jobs will be outsourced from Microsoft call centers located in
Charlotte, NC, and Issaquah, WA.
Managers in Las Colinas have been telling employees for months that
they should start looking for work because their jobs are going to
India. Poore expects to lose his job soon. Microsoft has stated on many
occasions that they will not lay off U.S. workers and send the jobs
offshore. In response to questions about Microsoft offshoring jobs,
company spokesperson Stacy Drake told the San Jose Mercury News in
January, We are not replacing U.S. jobs or laying off workers.''
(http://www.bayarea.com/mld/mercurynews/business/5029306.htm)
Drake also said that Microsoft would be adding 4,000 new positions in
the United States this year and 1,000 positions overseas.
Writing on the wall in Las Colinas
Emerging details in Las Colinas appear to contradict Microsofts
statements about not outsourcing U.S. high-tech jobs. Internal
Microsoft emails have extolled a new call center in Hyderabad, India,
and the steady attrition of Las Colinas workers whose positions go
unfilled have caused many employees to wonder how safe their jobs
really are.
An email from Microsoft manager Aiden Wayne entitled Systems India
Plans, dated May 5, circulated among Las Colinas employees, causing the
rumor mill to churn over the past few months.
Wayne wrote, I want to alleviate concerns about Redmond, Dublin and
Singapore job impact specific to our group. To date we have grown our
Hyderabad group by transplanting a small number of open employee
positions and focusing on migration of vendor dev, test, and support,
roles.
The FY04 emphasize (sic) will be on global productivity and quality
improvements; our Hyderabad team will continue to grow, though at a
slower pace than FY 03.
An article in the December 2002 issue of an internal Microsoft Web
publication called Interface, titled "Our expanding relationship with
vendors in India," leads with a story about the increasing reliance on
Indian workers:
"This exploding growth, combined with the emergence of dependable,
high-quality vendors in India and some significant cost advantages, has
led Microsoft to rapidly expand its outsourcing program in India.
Several hundred vendor employees in India are already working on
projects for various Microsoft product teams, a number that is doubling
every year."
If Microsoft has in fact doubled their business with Indian vendors for
the last four years, it raises the question of whether new Microsoft
jobs are being created in India, or whether U.S. jobs are being
offshored to India to save on labor costs.
Another Interface article titled Outsourcing 101: Planning, Selection,
Negotiation and Best Practices offers Microsoft managers a robust set
of resources, including an internal legal team and workforce
consultants, that cover all the facets outsourcing presumably to make
it as easy as possible to offshore jobs.
And of course there is the now-infamous line uttered by the Senior Vice
President of the Windows Division, Brian Valentine, in a presentation
to company managers in which he said: Pick a project to outsource
today.
Valentine said that Microsoft could get the same work at roughly half
the price by shipping jobs to India, which clearly the company has
decided will be its course of action with its call centers.
Valentine has since said that Microsoft outsources work as a way of
staying competitive in the global market which certainly may be true,
but at a high cost to U.S. high-tech workers who find themselves out of
work in a tough economy.
Its not secret in Las Colinas that Microsoft is tapping India for
well-educated software developers and is opening offices there. But
workers in Las Colinas and at other Microsoft sites worry that big
expansion plans will equate to their jobs heading overseas. Many
employees will not speak out about the possibility of their jobs being
offshored for fear of reprisal; however, a few have spoken out about
the situation.
Corey Goode, a vendor Internal Support Technician in Las Colinas, said
he inquired about his job security and received a not-so-cryptic
response from his manager: I feel safe, but if youre in the tech
field, you might think about moving to India.
Incontrovertible evidence of Microsofts outsourcing came to light
for Goode when he participated in a regular weekly conference call with
supervisors at Microsofts headquarters in Redmond, WA. Lisa Chiang,
a Microsoft Service Readiness Manager, let slip comments about the
scheduled closures of facilities in North Carolina and Texas and the
training of call-center workers in India. The cat was out of the bag
for Goode, and his manager knew it.
Goodes manager told him: Six weeks from now your position will be
ending because all the call-routing operations in Texas and North
Carolina will be handled in India.
Goode knew that the first firings in Las Colinas would be the vendors,
and he was correct. He, along with all the other contract employees in
Las Colinas, was laid off June 27.
Goode, like many high-tech workers, has struggled to reconcile the
steady offshoring of U.S. high-tech jobs.
I am dumbfounded to find out that our largest and most profitable
corporations are offshoring the jobs that fueled the middle class
through the boom of the '90s. Now is not the time for our corporations
to sell us out again. After the corporate corruption that has dominated
the news for the last few years, is this the next embarrassing
spotlight on American business ethics?
Shortly before he was laid off, Goode received an ironic send off that
encapsulates Microsofts attitude towards employees soon to lose
their jobs to offshoring.
Upon recently passing a key performance audit, Microsofts Texas and
North Carolina Customer Central call-center workers were sent a
congratulatory email from manager Lisa Chaing:
YOU did it!! Thanks to everyone for your dedication to making this
happen. I know that there were some pain points along the way, but it
is really awesome for us to accomplish this the first time. Im so
proud of us, Chiang wrote.
Goode wasnt impressed.
In spite of this great performance audit, they are still laying off
people to send their jobs to India. Go figure, Goode wrote, amazed at
Microsofts gall to congratulate their employees while at the same
time making plans to dump them.
Frustration and dismay
During a recent speech in Seattle, Microsoft Chief Executive Steve
Ballmer said there is a shortage of skilled labor in the hiring market,
as Microsoft tries to fill 2,000 local openings.
With 2000 open positions, it would stand to reason that Microsoft would
consider its hiring own employees first. But that hasnt happened in
Las Colinas, where frustration over possible unemployment has the
rumor-mill running overtime. In the Dallas area, the unemployment rate
currently stands at 6.6%, a fact of which high-tech workers are all too
aware.
One little-known point is the domino effect on communities when
high-tech layoffs occur. It has been estimated that for every one
high-tech job lost, three other local ancillary jobs also go. Multiple
four unemployed workers by a few hundred projected Las Colinas
positions, and the numbers start affecting the well-being of the
surrounding communities.
Microsofts plan appears to be to lay off employees in small groups
over an extended period of time by the end of the fiscal year 2004,
according to Waynes email which puts everyone on a hot seat
wondering if they will be next to go.
After six years of outstanding performance reviews and a concerted
effort to increase his technical skills by obtaining several Microsoft
certifications in MCSE and MCSA for Windows 2000, Poore feels betrayed
by Microsoft.
So here I am, 6-plus years at Microsoft and no future. My questioning
of Microsoft's ethics and values obviously came with a price. My
biggest problem is I just can't quit; I have a wife and a four-year old
daughter. So I continue to work my ass off and keep my performance
above average to prevent Microsoft with any reason to fire me. It's
inevitable that my group is going to get outsourced so I've decided to
grin and bear it until the end, Poore said, aware that his words might
hasten his inevitable lay off.
Another full-time employee, who wished to remain anonymous, expressed
her frustration at the situation in Las Colinas.
Now we are faced with being laid off due to the migration of tech
workers to India. My greatest concern about being laid off is that
management will start looking for any reason to fire us so that they
won't have to give us severance packages. Were all paranoid as hell
now, and thats no way to live a life! she said.
This is just about all everyone is talking about and the mood is pretty
grim. Our motivation now is to not do anything at all to get fired. And
yes, we all are afraid that MS will nitpick people to fire so that
there won't be as many severance packages they have to give out.
But even the cushion of a severance package may not go with these
exiting employees.
With yearly evaluations for blue badges (full-time employees) coming up
at the end of June, many full-time employees will be getting some
surprising feedback on their reviews, Goode said.
I was told by my manager, Goode said, that a lot of these people are
going to be released, on quote, performance issues so they
(Microsoft) dont have to pay severance. Microsoft is going to start
releasing people a little at a time. She said by the end of this fiscal
year, they were going to release a good amount. By the end of the next
fiscal year they would have it complete.
Goode and Poore are resigned to their jobs being outsourced Goodes
last day was Friday, June 27, and Poore believes that his pink slip
isnt far behind.
Goode has started a Web site to publicize Microsofts outsourcing
(www.goodetech.com) and organize laid-off workers.
For many Microsoft Customer Central employees, the companys
offshoring tactics have dashed the promises of bright futures within
Microsoft.
Goode and Poore wonder, along with the majority of U.S. high-tech
workers, wonder why a company with more than $46 billion in the bank
would decide dump its own dedicated, highly motivated full-time
employees in favor of training brand new workers in another country.
"Short-sighted corporate policy focused on saving a few bucks in the
short run will have an enormous deleterious impact on the entire U.S.
economy if not checked soon," warned Paul Almeida, the AFL-CIO
Department of Professional Employees President at a House panel on June
18.
One employee is all too aware of that fact.
Sheesh! It'd be easier to change careers! Maybe I'll find a
receptionist job or just go back to waiting tables. They can't
outsource waiters to India, now can they?
http://www.computerworld.com/managementtopics/management/outsourcing/story/0,10801,82761,00.html
Soviet technology legacy draws offshore work
By Patrick Thibodeau
JULY 03, 2003
The U.S. IT industry is tapping into the technological prowess of
the former Soviet Union, which is emerging as a research and
development center for software and telecommunications firms, a new
report by Aberdeen Group Inc. has found.
But the country's software development skills, which can be accessed at
a cost well below U.S. rates, is also appealing to managers of non-IT
firms. Craig Maccubbin, vice president of technology at online travel
service LasVegas.com LLC, is one of them.
"Many [Russian developers] are ex-Soviet military technologists and
programmers, and because of that, they have had classical training in
software development," Maccubbin said. "They are so disciplined that
there is almost a level of inflexibility to their approach," he said.
But that level of discipline also "helps the process of working with
them immensely."
The report from Boston-based Aberdeen found that nearly three-fourths
of the offshore work in Russia is undertaken by IT companies, said
Stephen Lane, the analyst who authored the report. IT companies are
setting up development centers in Russia to help build a market there,
as well as to use Russian talent for high-end development.
"What they do have is a culture that is focused on problem-solving and
focused on using technology in an innovative fashion," Lane said. But
"there is not a Russian company out there that can compete with an
Indian company in terms of scale or scope."
Maccubbin uses Epam Systems Inc., a Princeton, N.J.-based service
provider with operations in Moscow and Minsk, Belarus. Major Las Vegas
resort operators established LasVegas.com to give consumers the ability
to book flights, show tickets and even golf course tee times from one
site.
Maccubbin relies on the development workers at Epam's Minsk facility to
build and maintain most of the Web site's back-end functions. But the
customer-facing aspects, such as graphic design work and other critical
"defining characteristics," are handled in the U.S. "You can't
outsource that to anybody," he said.
According to Maccubbin, developers in the U.S. cost about $38 per hour,
while the Russian per-hour rate is as much as $20 less.
Bob Pryor, who heads New York-based Cap Gemini Ernst & Young's
outsourcing services, agreed that Russia has some very advanced
technological skills. But he believes the country will remain a
relatively small part of the offshore outsourcing market because the
government isn't developing the industry and may be living off the
legacy of its past.
"I don't see any significant investment for new skills and
capabilities," he said.
Marc Herbet, executive vice president of Sierra Atlantic Inc., an
application management company in Fremont, Calif., that runs an
offshore center in India, said Russia may well take off as an offshore
outsourcing center if Europeans begin embracing offshore work,
particularly because of the proximity.
While various countries offer certain advantages in offshore
development, personal relationships sometimes drive the choice of
location.
Matt Greer, CEO of Zeeo Interactive Inc., a Web development firm in
Boston, said his introduction to Russia came via a Russian emigre
working at his company. Outsourcing offshore became a necessity to
compete, Greer said, particularly when client IT budgets were cut.
"It was prohibitively expensive for us to bring on domestic resources
to get the work done," he said.
http://www.washtech.org/wt/news/industry/display.php?ID_Content=4585
July 1, 2003
Microsoft plans largest lay-off of full-time employees in company
history
WashTech News
By Jeff Nachtigal
When Eric Poore began working as a customer service representative for
Microsofts technical call-routing center in 1997, he was told his
advancement opportunities were endless.
Two years into his Microsoft career Poores hard work paid off with a
promotion to Outlook Technical Router, where he managed technical
questions about Microsofts email program. But less than a year
later, the position was outsourced a handy euphemism for being sent to
India or elsewhere to cut labor costs - and he was demoted back to his
original customer service job.
Four years after Poore lost his first position to outsourcing, he is
about to lose his six-year career because Microsoft is in the process
of a massive relocation of Customer Central call center jobs to India
and Canada.
Employees estimate that Microsoft is planning to eliminate at least 800
jobs in the next fiscal year at the company's Las Colinas facility
outside of Dallas, Texas and shift the work offshore.
If this outsourcing goes as expected, it will be the largest one-time
firing of full-time Microsoft employees - in the companys history.
Lori Moore, Vice President of Microsoft Product Support Services (PSS),
visited the Las Colinas site in April for a company-wide meeting to
talk about fiscal year 2004 plans. The message, according to Poore, was
exceedingly clear.
It was an open forum and people were asking about Las Colinas expansion
plans, but Moore was giving us the standard corporate bob-and-weave
answers, clearly giving us the message that there were no plans for
expansion or development of our site. She said that Microsoft would
focus all of its efforts on India to position them for global
expansion, Poore said.
The managers here are very clear - by the end of fiscal year 2004, our
jobs will all be gone, Poore said.
There are over 1,300 Microsoft workers at the Las Colinas, Texas,
Customer Central site, the first contact for help desk phone questions
about Microsoft products, and according to Poore, hundreds of full-time
Microsoft employees may be laid off as Microsoft moves their positions
offshore to India and Nova Scotia, Canada.
In addition, Poore has heard from Las Colinas managers that many more
jobs will be outsourced from Microsoft call centers located in
Charlotte, NC, and Issaquah, WA.
Managers in Las Colinas have been telling employees for months that
they should start looking for work because their jobs are going to
India. Poore expects to lose his job soon.
Microsoft has stated on many occasions that they will not lay off U.S.
workers and send the jobs offshore. In response to questions about
Microsoft offshoring jobs, company spokesperson Stacy Drake told the
San Jose Mercury News in January, We are not replacing U.S. jobs or
laying off workers.
(http://www.bayarea.com/mld/mercurynews/business/5029306.htm)
Drake also said that Microsoft would be adding 4,000 new positions in
the United States this year and 1,000 positions overseas.
Writing on the wall in Las Colinas
Emerging details in Las Colinas appear to contradict Microsofts
statements about not outsourcing U.S. high-tech jobs. Internal
Microsoft emails have extolled a new call center in Hyderabad, India,
and the steady attrition of Las Colinas workers whose positions go
unfilled have caused many employees to wonder how safe their jobs
really are.
An email from Microsoft manager Aiden Wayne entitled Systems India
Plans, dated May 5, circulated among Las Colinas employees, causing the
rumor mill to churn over the past few months.
Wayne wrote, I want to alleviate concerns about Redmond, Dublin and
Singapore job impact specific to our group. To date we have grown our
Hyderabad group by transplanting a small number of open employee
positions and focusing on migration of vendor dev, test, and support,
roles.
The FY04 emphasize (sic) will be on global productivity and quality
improvements; our Hyderabad team will continue to grow, though at a
slower pace than FY 03.
An article in the December 2002 issue of an internal Microsoft Web
publication called Interface, titled "Our expanding relationship with
vendors in India," leads with a story about the increasing reliance on
Indian workers:
"This exploding growth, combined with the emergence of dependable,
high-quality vendors in India and some significant cost advantages, has
led Microsoft to rapidly expand its outsourcing program in India.
Several hundred vendor employees in India are already working on
projects for various Microsoft product teams, a number that is doubling
every year."
If Microsoft has in fact doubled their business with Indian vendors for
the last four years, it raises the question of whether new Microsoft
jobs are being created in India, or whether U.S. jobs are being
offshored to India to save on labor costs.
Another Interface article titled Outsourcing 101: Planning, Selection,
Negotiation and Best Practices offers Microsoft managers a robust set
of resources, including an internal legal team and workforce
consultants, that cover all the facets outsourcing presumably to make
it as easy as possible to offshore jobs.
And of course there is the now-infamous line uttered by the Senior Vice
President of the Windows Division, Brian Valentine, in a presentation
to company managers in which he said: Pick a project to outsource
today.
Valentine said that Microsoft could get the same work at roughly half
the price by shipping jobs to India, which clearly the company has
decided will be its course of action with its call centers.
Valentine has since said that Microsoft outsources work as a way of
staying competitive in the global market which certainly may be true,
but at a high cost to U.S. high-tech workers who find themselves out of
work in a tough economy.
Its not secret in Las Colinas that Microsoft is tapping India for
well-educated software developers and is opening offices there. But
workers in Las Colinas and at other Microsoft sites worry that big
expansion plans will equate to their jobs heading overseas. Many
employees will not speak out about the possibility of their jobs being
offshored for fear of reprisal; however, a few have spoken out about
the situation.
Corey Goode, a vendor Internal Support Technician in Las Colinas, said
he inquired about his job security and received a not-so-cryptic
response from his manager: I feel safe, but if youre in the tech
field, you might think about moving to India.
Incontrovertible evidence of Microsofts outsourcing came to light
for Goode when he participated in a regular weekly conference call with
supervisors at Microsofts headquarters in Redmond, WA. Lisa Chiang,
a Microsoft Service Readiness Manager, let slip comments about the
scheduled closures of facilities in North Carolina and Texas and the
training of call-center workers in India. The cat was out of the bag
for Goode, and his manager knew it.
Goodes manager told him: Six weeks from now your position will be
ending because all the call-routing operations in Texas and North
Carolina will be handled in India.
Goode knew that the first firings in Las Colinas would be the vendors,
and he was correct. He, along with all the other contract employees in
Las Colinas, was laid off June 27.
Goode, like many high-tech workers, has struggled to reconcile the
steady offshoring of U.S. high-tech jobs.
I am dumbfounded to find out that our largest and most profitable
corporations are offshoring the jobs that fueled the middle class
through the boom of the '90s. Now is not the time for our corporations
to sell us out again. After the corporate corruption that has dominated
the news for the last few years, is this the next embarrassing
spotlight on American business ethics?
Shortly before he was laid off, Goode received an ironic send off that
encapsulates Microsofts attitude towards employees soon to lose
their jobs to offshoring.
Upon recently passing a key performance audit, Microsofts Texas and
North Carolina Customer Central call-center workers were sent a
congratulatory email from manager Lisa Chaing:
YOU did it!! Thanks to everyone for your dedication to making this
happen. I know that there were some pain points along the way, but it
is really awesome for us to accomplish this the first time. Im so
proud of us, Chiang wrote.
Goode wasnt impressed.
In spite of this great performance audit, they are still laying off
people to send their jobs to India. Go figure, Goode wrote, amazed at
Microsofts gall to congratulate their employees while at the same
time making plans to dump them.
Frustration and dismay
During a recent speech in Seattle, Microsoft Chief Executive Steve
Ballmer said there is a shortage of skilled labor in the hiring market,
as Microsoft tries to fill 2,000 local openings.
With 2000 open positions, it would stand to reason that Microsoft would
consider its hiring own employees first. But that hasnt happened in
Las Colinas, where frustration over possible unemployment has the
rumor-mill running overtime. In the Dallas area, the unemployment rate
currently stands at 6.6%, a fact of which high-tech workers are all too
aware.
One little-known point is the domino effect on communities when
high-tech layoffs occur. It has been estimated that for every one
high-tech job lost, three other local ancillary jobs also go. Multiple
four unemployed workers by a few hundred projected Las Colinas
positions, and the numbers start affecting the well-being of the
surrounding communities.
Microsofts plan appears to be to lay off employees in small groups
over an extended period of time by the end of the fiscal year 2004,
according to Waynes email which puts everyone on a hot seat
wondering if they will be next to go.
After six years of outstanding performance reviews and a concerted
effort to increase his technical skills by obtaining several Microsoft
certifications in MCSE and MCSA for Windows 2000, Poore feels betrayed
by Microsoft.
So here I am, 6-plus years at Microsoft and no future. My questioning
of Microsoft's ethics and values obviously came with a price. My
biggest problem is I just can't quit; I have a wife and a four-year old
daughter. So I continue to work my ass off and keep my performance
above average to prevent Microsoft with any reason to fire me. It's
inevitable that my group is going to get outsourced so I've decided to
grin and bear it until the end, Poore said, aware that his words might
hasten his inevitable lay off.
Another full-time employee, who wished to remain anonymous, expressed
her frustration at the situation in Las Colinas.
Now we are faced with being laid off due to the migration of tech
workers to India. My greatest concern about being laid off is that
management will start looking for any reason to fire us so that they
won't have to give us severance packages. Were all paranoid as hell
now, and thats no way to live a life! she said.
This is just about all everyone is talking about and the mood is pretty
grim. Our motivation now is to not do anything at all to get fired. And
yes, we all are afraid that MS will nitpick people to fire so that
there won't be as many severance packages they have to give out.
But even the cushion of a severance package may not go with these
exiting employees.
With yearly evaluations for blue badges (full-time employees) coming up
at the end of June, many full-time employees will be getting some
surprising feedback on their reviews, Goode said.
I was told by my manager, Goode said, that a lot of these people are
going to be released, on quote, performance issues so they
(Microsoft) dont have to pay severance. Microsoft is going to start
releasing people a little at a time. She said by the end of this fiscal
year, they were going to release a good amount. By the end of the next
fiscal year they would have it complete.
Goode and Poore are resigned to their jobs being outsourced Goodes
last day was Friday, June 27, and Poore believes that his pink slip
isnt far behind.
Goode has started a Web site to publicize Microsofts outsourcing
(www.goodetech.com) and organize laid-off workers.
For many Microsoft Customer Central employees, the companys
offshoring tactics have dashed the promises of bright futures within
Microsoft.
Goode and Poore wonder, along with the majority of U.S. high-tech
workers, wonder why a company with more than $46 billion in the bank
would decide dump its own dedicated, highly motivated full-time
employees in favor of training brand new workers in another country.
"Short-sighted corporate policy focused on saving a few bucks in the
short run will have an enormous deleterious impact on the entire U.S.
economy if not checked soon," warned Paul Almeida, the AFL-CIO
Department of Professional Employees President at a House panel on June
18.
One employee is all too aware of that fact.
Sheesh! It'd be easier to change careers! Maybe I'll find a
receptionist job or just go back to waiting tables. They can't
outsource waiters to India, now can they?
http://www.bayarea.com/mld/mercurynews/business/6209151.htm
Posted on Tue, Jul. 01, 2003
Microsoft shifting more customer-support jobs to India
By Kristi Heim
Mercury News Seattle Bureau
SEATTLE - Microsoft plans to shift more of its technical-support jobs
overseas in the next year, acknowledging the move could mean hundreds
of layoffs in three U.S. states.
In April, Microsoft opened a new customer-support center in Bangalore,
India. As it grows, the Bangalore center could take over more of the
customer-service and technical-support work now handled in Issaquah,
Wash.; Charlotte, N.C.; and Las Colinas, Texas, Microsoft acknowledged
Monday.
The company has about 800 full-time employees at each site. It's
unclear how many of those employees would be affected, said Microsoft
spokeswoman Stacy Drake. Microsoft plans to hire 150 employees in
Bangalore over the next fiscal year, which starts today.
Microsoft, like many technology companies, has been shifting
customer-service operations overseas. The company relies on workers in
India to cut labor costs and run an 18-hour worldwide business cycle.
Last July, Microsoft Senior Vice President Brian Valentine gave a
presentation urging managers to begin outsourcing software-development
projects to contractors in India for ``quality work at 50 to 60 percent
of the cost.''
Changing course
The company in January maintained that outsourcing was not intended to
replace jobs in the United States and would not result in layoffs.
``Since that time we have launched this program out of Bangalore. There
may be some impact on U.S. sites. In our business, we're always
evaluating different strategies to improve customer support,'' Drake
said Monday.
Employees in Las Colinas, near Dallas, told the Seattle-based
Washington Alliance of Technology Workers that they have been informed
of the plan by their supervisors and been told to begin looking for new
jobs.
``The managers here are very clear; by the end of fiscal year 2004, our
jobs will all be gone,'' Eric Poore, a Microsoft employee in Las
Colinas who handles technical support for enterprise customers, said in
a statement issued by the union.
The Washington Alliance has started a campaign to stem what it calls
the ``Great Tech Job Exodus,'' urging elected officials to discourage
U.S. technology companies from sending jobs offshore.
The union called this year's plan to move jobs to Bangalore ``the
largest one-time firing of full-time Microsoft employees in the
company's history.''
`Scared people'
``There's a lot of very scared people here,'' said Corey Goode, who was
laid off last week from his contract job as a Microsoft network
administrator in Las Colinas. ``They're letting so many people go. My
boss told me basically if you want to work for Microsoft, you're going
to have to work in India.''
Goode, who has since found work at another company, said he took part
in a conference call earlier this year with Microsoft managers in
Redmond, Wash., during which they discussed the closing of offices in
North Carolina and Texas. ``The layoffs are coming in the next two or
three months in small waves,'' he said.
Last week, Microsoft laid off 161 employees in its nationwide
consulting business, including seven positions in San Francisco. In
that business, Microsoft will continue to focus on designing software
solutions for customers but let partner companies handle the
installation and support.
Contact Kristi Heim at kheim@mercurynews.com or at (206) 632-8160.
http://www.financialexpress.com/fe_full_story.php?content_id=37377
US Biotech Companies Evince Interest In Outsourcing To India
AJAY JAIN
New Delhi: Andhra Pradesh (AP) government has signed memoranda of
understanding (MoU) with the governments of Thailand and the Canadian
province of Sasketchwan to give a boost to the biotechnology industry.
US biotech companies have also expressed interest in outsourcing work
to India, and the latter can also look forward to flow of funds from US
venture capital funds (VC).
These were some of the outcomes of the recent biotech mission from the
country to USA. Confederation of Indian Industry (CII) and the US-India
Business Council had organised a one-day seminar last week in
Washington coinciding with the Bio Convention, a global biotech show
held in the US capital.
CII director Sandhya Tewari told FE, The mission was an image-building
success for the countrys biotech industry. Our biggest problem is
being perceived as a country with a poor intellectual property (IP)
regime. However we were largely successful in allaying such fears, and
convincing the US industry that we would have an effective
WTO-compliant product patents regime in place post-2005.
Russel Stamates, representing law firm Heller Ehrman, agreed that such
sessions are useful as India is perceived as a country where patents
get stolen keeping product innovations away from the market, she added.
The two MoUs signed by the AP government are about sharing resources
and ideas to promote this industry in the state. The Canadian province
is a significant agri-biotech centre, having an agrarian economy with
universities and institutes to support the same. The cooperation with
the Thai government will be in the areas of marine and agri biotech,
said Ms Tewari.
VC funds are not easily available to Indian companies. We tried to
convince US funds to start looking at regions like India where the IT
success story could well be repeated by biotech. The companies, while
admitting distance was a problem, did promise to look more closely at
India, she said.
One model suggested by ICF Ventures managing director Norman Prouty was
to set up a contract research outsourcing firm in USA, raise VC and
outsource much of the work from India. This is one of the ideas that
could work, and Indian companies can get money for contract research if
not from VCs, she added.
One can expect substantial business from USA, especially in the area of
contract research. It would be difficult to quantify the same. But the
biggest advantage of this mission is that it helped raise the profile
of Indian industry at one of the largest global gathering of the
biotech industry, said Ms Tewari.
http://www.ctnow.com/business/hc-thehtfd0703.artjul03.story
Hartford Life Sending Some IT Work To India
By DIANE LEVICK
Courant Staff Writer
July 3 2003
Hartford Life is outsourcing some of its information technology
functions to a firm in India in a move that will eliminate eight
employees' jobs and shift work overseas.
Simsbury-based Hartford Life confirmed Wednesday that it has signed a
new contract with Satyam in India, and expects that the arrangement
will reduce overall information technology costs by 15 percent.
Hartford Life won't disclose the dollar savings or cost of the
contract, and doesn't know yet how many Satyam employees will be
assigned to the contract, Hartford Life spokesman David M. Potter said.
The Satyam agreement represents Hartford Life's most substantial foray
into outsourcing to a foreign firm - a move that many local companies,
such as Aetna and CIGNA, made earlier and, in many cases, more
extensively. Like many companies, Hartford Life had long used U.S.
consultants for some IT work.
Hartford Life, which is part of The Hartford Financial Services Group
Inc., had also hired India-based Cognizant within the past year.
Cognizant has been doing technical rewrites of software for Hartford
Life's Group Benefits Division, Potter said.
Satyam has already worked in several lines of the company's business,
and "firmly understands Hartford Life's organization and methodology,"
a Hartford Life memo told employees last week.
However, the practice of "offshoring" IT work - Hartford Life calls it
"remote sourcing" - has angered many IT workers.
Even if such contracts don't eliminate many existing employees, they
ship work overseas that would otherwise provide jobs for Americans,
critics complain. Many U.S. IT workers have been unable to find jobs,
and the use of cheaper foreign labor has driven down pay rates for
U.S.-based IT consultants.
"You have to look at it from the perspective that it's a worldwide
economy today," Potter said. The Satyam agreement, he said, is "part of
our continuing efforts to improve operating efficiency and enhance our
competitive position."
Satyam will handle "non-strategic" work, such as supporting older
"legacy" computer systems and converting or upgrading systems, Potter
said.
That will allow Hartford Life employees to concentrate on more
strategic work and more sophisticated business projects, he said.
Attrition and reassignments will help minimize the impact of the Satyam
contract on Hartford Life's 1,050 IT employees, Potter said.
A "handful" of Satyam employees are currently at Hartford Life on
visas, Potter said.
The offshore arrangement "supports the flexibility we need to quickly
take on new business" and provides "quick access to diverse skills,
which will help us in good times and bad," the company's memo said.
Copyright 2003, Hartford Courant
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