www.techsunite.org/news/techind/offshoring1.cfm
Congress launch an immediate study of the IT offshoring trend. In just the last few years, his employer -- Riverdeep Interactive Learning Limited -- had acquired Broderbund, Edmark, The Learning Company and other educational courseware and seemed to have dodged the bullet that had either crippled or shattered other stalwarts of the tech economy. Samuelson says that after his team had conducted interviews and was about to hire several new software engineers, word came from company officials that they had closed a major deal with a company in India called 48 NIIT Limited. Just a few minutes' drive away, at Microsoft's Redmond campus, company executive Brian Valentine presented the software giant's 49 plans to begin moving more of its software development to India. Valentine, who is the Senior Vice President of the Windows Division, urged department heads to "think India" when making future hires. What did you pay for CSGs contingent staff, or contractors last year? Executives at Riverdeep were apparently of the same mind as those at Microsoft. They sent four Indian software developers from NIIT to Redmond, where Samuelson and his team spent three weeks training them on the project. Days later, Riverdeep sent word to the Redmond office that it was being closed and that the work would be sent to India. Samuelson said the Indian engineers, who had rented an apartment and purchased furniture, were sent back home. Shortly after, Samuelson was told that the project he was working on was being moved to NIIT in India. IT execs rally around offshoring game plan Microsoft has fared much better than Riverdeep and most other tech companies during the recession. But company executives worry that the growing popularity of Linux and other free, open source software could erode its dominance. Last November, Bill Gates traveled to New Delhi, where he announced that Microsoft would invest $400 million over the next three years to expand its activities in India, $100 million of which will go to its software development facility in Hyderabad. Redmond is not the center of the universe," he said in his July presentation, noting that having developers work across time zones makes for an effective 16- to 18-hour workday, reducing production time. At a December meeting of Wall Street analysts, Forbes Magazine reported that the company announced it is embracing offshore outsourcing as a way to undercut its rival, IBM. HP figures a high-end programmer in India costs about $20,000 a year, less than 25 percent of the cost in the United States. Forrester says major software firms like Oracle Corporation and i2 Inc. McCarthy, says companies are embracing offshore outsourcing because they feel they can get better quality work at 50 percent of the cost they would pay for domestic labor. This practice allows them to maintain production around the clock, up to 24 hours per workday. It also rates salary requirements and English-language proficiency of native workers, as well as the infrastructure and political stability of their native countries. The online version of the magazine even provides an 50 interactive map. Forrester predicts that successful CIOs will aspire to become chief operating officers. LeEarl Bryant, president of the Institute for Electrical and Electronics Engineers Inc-USA, wonders whether there will be jobs available to those among her organization's 220,000 members who are unemployed once the economy improves. Even if IT workers find jobs, they may also find that wages and compensation such as medical insurance and 401K contributions have dropped dramatically. Employees are being pressed to work endless hours, while facing threats that their jobs may be moved overseas, notes research director Diane Morello. In 2002, proposed reductions in IT jobs were 33 percent of overall announced job reductions. Even though Pauer, who works for the Employment Security Department, believes that the recession is on its way out, a recovery in the Seattle-area job market may not occur for at least another year. Pauer estimates that about 80,000 jobs have been lost in King and Snohomish counties alone. He is receiving unemployment benefits for now, but he still struggles with whether he will return to the industry. He believes that Riverdeep's motive in moving production offshore was to increase the company's quarterly earnings. David Beckman is a writer who spent over 10 years in the Seattle-area information technology industry.
|