Rosy? Nay, Says America

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.

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

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.

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.

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

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.

‘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

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