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Reuters
December 24, 2003

US Companies Moving More Jobs Overseas

By David Zielenziger

NEW YORK - U.S. corporations are picking up the pace in
shifting well-paid technology jobs to India, China and
other low-cost centers, but they are keeping quiet for
fear of a backlash, industry professionals said.

Morgan Stanley estimates the number of U.S. jobs
outsourced to India will double to about 150,000 in the
next three years. Analysts predict as many as two
million U.S. white-collar jobs such as programmers,
software engineers and applications designers will
shift to low cost centers by 2014.

But the biggest companies looking to "offshoring" to
cut costs, such as Microsoft Corp. , International
Business Machines Corp. and AT&T Wireless, are
reluctant to attract attention for political reasons,
observers said this week.

"The problem is that companies aren't sure if it's
politically correct to talk about it," said Jack Trout,
a principal of Trout & Partners, a marketing and
strategy firm. "Nobody has come up with a way to spin
it in a positive way."

This causes a problem for publicly traded companies,
which would ordinarily brag about cost savings to
investors. Instead, they send vague signals that they
are opening up operations in India and China, but often
decline to elaborate.

Moreover, on the threshold of a U.S. presidential
election year, job losses are a hot button issue. A
company that highlighted a major job transfer could
wind up in the campaign debate.

Multinationals find that when they trumpet expansion
overseas, they cause problems at home. When Accenture
Ltd. executives in India this month announced plans to
double their staff to 10,000 next year, they triggered
a flood of calls to the company's U.S. offices about
U.S. job losses.

Offshoring companies "are paying Chinese wages and
selling at U.S. prices," said Alan Tonelson, of the
U.S. Business and Industrial Council, a trade group for
small business. "They're not creating better living
standards for America."

The U.S. sales director for one of India's top computer
services providers said his company has won business
from customers such as Walt Disney Co., Time Warner
Inc.'s CNN and the Fox division of News Corp. -- none
of which want public disclosure.

In India, some technology companies have recently
adopted lower profiles. Microsoft Corp. has been
removing its name from minibuses used to ferry
engineers on overnight shifts. Major Indian
beneficiaries of U.S. business such as Infosys
Technologies Ltd., Wipro Ltd. and Satyam Computer
Services Ltd. have stopped identifying new customers.

While there have been reports that IBM intends to ship
4,700 high-end jobs to India and China next year, they
mark a rare instance when figures "have been reported
in black and white," said Linda Guyer, president of
[EMAIL PROTECTED], a union that has tried to organize IBM
employees.

Those numbers were not released by IBM, but rather
disclosed by the Wall Street Journal, which had
obtained an internal memo. The company has declined to
comment.

Guyer believes as many as 40,000 of IBM's 160,000 U.S.
jobs will be transferred overseas by 2005, a figure she
says was gathered from phone calls by IBM employees.

Previously, IBM has pointed to a report by the McKinsey
Global Institute that concludes the U.S. economy
ultimately will benefit. The report was commissioned by
Nasscom, a group made up of Indian tech companies as
well as IBM's Indian services unit -- showing an effort
by those invested in offshoring to sway public opinion.

Recently, AT&T Wireless told the U.S. Securities &
Exchange Commission that it would lay off 1,900
employees this year. Communications Workers of America
members obtained an internal memo prepared by Tata
Consultancy Services of India that discussed how it
would assume those U.S. jobs.

Subsequently, AT&T Wireless officials acknowledged it
was exploring the job shifts but didn't offer details.

While some companies, such as Electronic Data Systems
Corp., CAP Gemini Ernst & Young and Sapient Corp.,
acknowledge they shift jobs abroad to exploit cost
advantages and around-the-clock work, IBM asserts that
it is not moving jobs but creating new ones.

"It's a business strategy, period. You cut costs. You
revamp. You look at what your mission statement says
and try to turn a profit," said Sylvia Thomas, who was
laid off by chipmaker Agere Systems Inc. after
declining offers to relocate to headquarters in
Allentown, Pennsylvania -- or to Singapore.

� 2003 Reuters Ltd

http://www.reuters.com/newsArticle.jhtml?storyID=4039177



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www.ctrl.org
DECLARATION & DISCLAIMER
==========
CTRL is a discussion & informational exchange list. Proselytizing propagandic
screeds are unwelcomed. Substance—not soap-boxing—please!   These are
sordid matters and 'conspiracy theory'—with its many half-truths, mis-
directions and outright frauds—is used politically by different groups with
major and minor effects spread throughout the spectrum of time and thought.
That being said, CTRLgives no endorsement to the validity of posts, and
always suggests to readers; be wary of what you read. CTRL gives no
credence to Holocaust denial and nazi's need not apply.

Let us please be civil and as always, Caveat Lector.
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