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Rosy? Nay, Says America

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DQI Bureau
New Update

Low-cost India becoming call center to the world



Dec 19, 2003



The Indian economy has been benefitting greatly from the increasing trend

towards outsourcing. Multinational companies have been moving certain corporate

functions to countries like India in an effort to save costs. In fact, outsourcing has given rise to job losses in the West, making the

issue a hot political potato for some governments.

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From data entry to tax returns, medical transcription to development services–multinational

companies are transferring their non-core business functions to external service

providers. And India has been at the forefront lapping up these lucrative

contracts.

Already, 250 of the Fortune 1000 companies have outsourced their work to

India due to many attractive factors. British unions say some 200,000 jobs will

be lost to outsourcing overseas. And the US expects more than 3.3 million

American jobs to be moved offshore by 2015– the bulk of it to India. So it is

no surprise that lobbies in the US and trade unions in the UK are protesting

against the job drain.

Channel News Asia, Singapore

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If This is 1-800 it must be Mumbai



Dec 22, 2003



The credit card company was chewing on my leg. They said I was a deadbeat who

owed them money. So the other day I called the 800-number to see what was the

problem. A very nice woman, in lilting tones, helped me out.

"Where are you?," I asked in passing. 

"New Delhi," said the woman from American Express.

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Only the day before I was trying to track down some information on a new Dell

computer I'd just bought. A man told me what I needed to know. Also all the way

from India. Not too long ago I got a call at home from someone trying to entice me to get

a new Visa card. He had a lovely brogue and I asked him when he'd come over.

"I'm not there. I'm still here," he said. From Dublin. It was

cheaper to hire someone in Ireland and pay the long distance bill than to have

someone on the horn here. I had an old Gateway desktop computer that kept going kablooey on me. I would

call their service number and get guidance on how to bring the machine back to

life. The technicians were in Newfoundland and Manitoba.

It's a small world after all.

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GE does it on GE scale. Microsoft, too. DuPont, Boeing, UTC, Procter &

Gamble and so many, many more. They're outsourcing America. As much as we might enjoy the international chitchat with folks from all

around the planet it is uneasy-making to consider how many jobs are vanishing as

companies shop around for ever-cheaper labor elsewhere.

It's terrific that there's more work for the poor folks abroad; it's a lot

less than terrific that there's work being lost on a gigantic scale for the poor

folks right here.

The Hartford Courant, US

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Lehman the latest to pull jobs from India



Dec 20, 2003



Leading financial services company Lehman Brothers has stopped using Indian

workers for its internal computer help desk, in another sign of a backlash

against using ‘offshore’ labour.

The New York-based firm last year hired two Indian companies–Tata

Consultancy Services and Wipro-to manage some of its IT operations.

About six weeks ago, however, Lehman stopped outsourcing its IT help desk,

which handles employee reports of computer problems, to Wipro. Top company

executives disclosed some details of the change last month during a conference

call with Louis Miscioscia, a Lehman IT services analyst, and with Lehman

clients.

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‘In terms of help desk, Indian firms could not provide the level of quality

and services Lehman needs,’ Miscioscia wrote in a Nov 28 research note. Also,

Dell said last month it stopped routing calls from corporate customers to its

call center in India after receiving complaints about the quality of service.

The calls are now being taken by customer service centres in the United States.

And last month, Indiana’s state government cancelled a US$15 million ($25.8

million) IT contract with Tata after officials concluded it was inappropriate to

use taxpayers’ money to pay foreign workers. The EU will also investigate the

growing trend of outsourcing work to low-wage economies. The inquiry, to begin

in March, follows a push by British union Amicus to put a stop to the practice,

the Times of India reported last week.

The Straits Times, Singapore

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Job migration is a bad trip



Dec 18, 2003



Just this week, "Big Blue" said it plans to transfer almost 5,000

IBM jobs in the United States abroad — perhaps some in Dallas. So maybe this

isn’t a jobless recovery after all. It’s just that the jobs are in Delhi,

not Dallas. Economists argue that the jobs we’re sending overseas aren’t

worth keeping. They say it’s better for our economy if companies cut costs and

become more profitable.

The real estate community certainly isn’t celebrating the transfer of US

jobs to India, Malaysia and the like. Real estate people know we need the extra

employment to fill the millions of square feet of commercial real estate that’s

going begging.

The Society of Industrial and Office Realtors estimates that about 40,000 US

jobs were lost to locations abroad in the first half of this year.

"I think it’s really going to affect the US office market," said

St. Louis broker Lynn Schenck, who is president of the society. "We just

got a report that indicated that it would delay the recovery of the US office

market for at least two years."

Two years is a lifetime when you are trying to lease an empty building. And

unlike jobs, you can’t ship real estate to Delhi.

The Dallas Morning News, US

Offshore Jobs in Technology: Opportunity or a Threat?



Dec 22, 2003



The US economy is finally getting stronger, but there seems to be one

unsettling weakness: the apparent wholesale flight of technology jobs like

computer programming and technical support to lower-cost nations, led by India.

The trend is typically described in ungainly terms - as "offshore

outsourcing" or "offshoring." But that rhetorical hurdle has done

nothing to lessen the recent public debate and expressions of angst over this

kind of job migration. There are some early signs of political reaction. Last

month, for example, the State of Indiana pulled out of a $15 million contract

with an Indian company to provide technology services. And a proposed bill in

New Jersey would restrict the use of offshore workers by companies doing work

for the state.

Forrester Research, a technology consulting firm, published a report this

month pointing out that the movement abroad is only gradual. The firm bemoaned

"the rising tide of offshore hype." Yet Forrester itself played a

significant role in framing the debate on offshore outsourcing, as well as

stirring fears, with a report last year. That report, published in November

2002, predicted that 3.3 million services jobs in America would move offshore by

2015, and added that the IT industry will "lead the initial overseas

exodus."

The New York Times, US

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