IBM to Export Highly Paid Jobs to India, China

Yahoo News ^ | Dec 15, 2003 | William M. Bulkeley and Peter Fritsch

[neverdem]

Mon Dec 15,12:14 AM ET

In one of the largest moves to "offshore" highly paid U.S. software jobs, International Business Machines Corp. (NYSE:IBM - News) has told its managers to plan on moving the work of as many as 4,730 programmers to India, China and elsewhere, Monday's Wall Street Journal reported.

delayed 20 mins - disclaimer Quote Data provided by Reuters

The unannounced plan, outlined in company documents viewed by The Wall Street Journal, would replace thousands of workers at IBM facilities in Southbury, Conn., Poughkeepsie, N.Y., Raleigh, N.C., Dallas, Boulder, Colo., and elsewhere in the U.S.Already, the managers have been told, IBM has hired 500 engineers in India to take on some of the work that will be moved.

IBM calls its plan, first presented internally to some midlevel managers in October, "Global Sourcing." It involves people in its Application Management Services group, a part of IBM's giant global-services operations, which comprise more than half IBM's 315,000 employees.

IBM's plan, still under development, will take place over a number of months in stages. About 947 people are scheduled to be notified during the first half of the coming year that their work will be handled overseas in the future. It isn't yet clear how many of the other 3,700 jobs identified as "potential to move offshore" in the IBM documents will move next year or some time later.

However, the fate of some of the targeted jobs isn't certain: IBM managers still haven't figured out whether all of the work the jobs represent can be performed just as well abroad. The jobs involve updating and improving software for IBM's own business operations.

Some workers are scheduled to be informed of the plan for their jobs by the end of January. After that they will be expected to train an overseas replacement worker in the U.S. for several weeks. The IBM workers marked for replacement have 60 days to find another job inside the company, likely to be a difficult task at a time when IBM is holding down hiring.

IBM declined to comment on what it called "internal presentations."

Wall Street Journal Staff Reporters William M. Bulkeley and Peter Fritsch contributed to this article.

[neverdem]

FWIW

[RiflemanSharpe]

With all the good paying jobs going overseas how do they expect us to buy what they sell?

[Bikers4Bush]

Well at least we won't have to go through the bothersome chore of giving any programming technology and secrets to China anymore. They'll be free to just take them.

[canis major]

Time to start boycotting IBM too.

[StolarStorm]

"Some workers are scheduled to be informed of the plan for their jobs by the end of January. After that they will be expected to train an overseas replacement worker in the U.S. for several weeks. The IBM workers marked for replacement have 60 days to find another job inside the company, likely to be a difficult task at a time when IBM is holding down hiring. "

Anyone who trains their replacement is a traitor to themselves and their country.

[neverdem]

Maybe a boycott of IBM is appropriate.

[Mo1]

Hmmmm .. Moving to India, an area that is a hot bed for terrorists and then there is the fact that India and Pakistan keep threatening to nuke each other

Something tells me that IBM will regret this move

[cpst12]

This is a net positive for economy...it will free up those 5000 programmers for other opportunities...the lines are always too long at Walmart, I bet some ex-programmers wouldn't need too much training to be able to handle the registers, right?

[Hat-Trick]

They didn't pay attention to what Michael Dell did when he moved his tech-support for the business side of Dell back "on-shore".

[TaxRelief]

Ahem. Did Willie Green give you permission to post this story?

[snippy_about_it]

You are correct. I've been saying for sometime now if they keep exporting American jobs and bringing in H1b visa workers to take American jobs then how can we afford to buy their products while we are unemployed or underemployed. They should be cognizant of the fact that this also means with lower wages or no wages we will be paying less taxes to support the politicians who support this loss of our jobs.

[joesnuffy]

IBM calls its plan, first presented internally to some midlevel managers in October, "Global Sourcing." It involves people in its Application
Management Services group, a part of IBM's giant global-services operations, which comprise more than half IBM's 315,000 employees.

Slave labor is a wonderfull thing...especially in countries that have well educated slaves

[Norse]

Well, what exactly do you want? If IBM does not take advantage of this, other international companies WILL, and I promise you that they WILL put OUR companies out of business, leaving us completely dead in the water. The correct thing is not to call our businesses traitors for simply wanting to SURVIVE, but to enact reforms here at home that make it more advantageous to do business in the U.S. than in other foreign nations.

[Golden Eagle]

Here's another article about this I attempted to post under Keyword IBM: http://story.news.yahoo.com/news?tmpl=story&cid=562&ncid=738&e=10&u=/ap/20031215/ap_on_hi_te/ibm_offshoring

IBM to Move Software Jobs to India, China

ARMONK, N.Y. - IBM Corp. plans to move up to several thousand skilled software jobs from the United States to India, China and other countries, which could amount to one of the biggest such actions yet in the technology industry.

IBM documents obtained by The Wall Street Journal said about 4,700 programming jobs could be shifted overseas to save costs, a growing high-tech industry trend known as "offshoring."

More than 900 people are already scheduled to be told of the move in the first half of 2004, while another 3,700 jobs have been identified as having the "potential to move offshore," the Journal said. IBM already has hired 500 engineers in India to take on some of the work that will be moved, the Journal reported.

The division affected is IBM's Application Management Services group, part of Big Blue's huge technology services division. The IBM facilities where workers could be replaced include offices in Dallas, Southbury, Conn., Poughkeepsie, N.Y., Raleigh, N.C., and Boulder, Colo.

IBM spokesman James Sciales said he would not comment on "internal presentations" but noted that most of IBM's work force, which now totals 315,000, has been overseas for years. Sciales also released a statement saying IBM expects hiring in the United States next year will match or exceed 2003 levels.

While companies long ago began moving manufacturing jobs and other blue-collar work to Asia, big business is now increasingly shifting skilled work there as well. According to International Data Corp., foreign workers performed about 5 percent of information technology services for American companies this year, but by 2007, that share will grow to 23 percent.

Often, the American workers being replaced are called upon to train their overseas replacements. The same will be expected of IBM employees whose jobs are being transferred, according to the Journal.

IBM shares were up 76 cents at $93.47 in morning trading on the New York Stock Exchange (news - web sites).

[The Electrician]

With all the good paying jobs going overseas how do they expect us to buy what they sell?

Isn't that a bit of overblown hyperbole? IBM has well over 100,000 high-paying jobs in the US, and they are adding more.

Others on this thread are suggesting boycotting IBM - wouldn't that be a foolish and shortsighted thing to do?

[adam_az]

However, the fate of some of the targeted jobs isn't certain: IBM managers still haven't figured out whether all of the work the jobs represent can be performed just as well abroad. The jobs involve updating and improving software for IBM's own business operations.

Some workers are scheduled to be informed of the plan for their jobs by the end of January. After that they will be expected to train an overseas replacement worker in the U.S. for several weeks. The IBM workers marked for replacement have 60 days to find another job inside the company, likely to be a difficult task at a time when IBM is holding down hiring.

I'm an ex-IBMer, I might be able to clarify what's going. It's maintenance programmers of IBM's internal systems, which are pretty bad as a general rule. The guys who get stuck on internal projects are usually there because they aren't good enough to do work for customers. I can tell you that based on first hand knowlege.

IBM is holding down hiring of NEW employees, but there is a separate internal job board for hiring WITHIN the company. You can bet that many of the better programmers will move around inside the company. Virtually everyone at IBM who has been in the company for a while has moved around quite a bit. It's inevitable.

If you don't find a job internallty in 60 days, you get the "voluntary separation" package, which I was able to get when I quit, because of departmental changes. It's very generous. I found another job (which I don't have to do any travel for!), and used my separation pay and unused vacation hours for a sizable downpayment on a house.

[swarthyguy]

Actually, it's more Pakistan is a worldwide fulcrum of terror.

To clarify things for you, it is the Indians who've been the victims of the waves of jihad for decades.

Nice of you to give the Pakistanis a pass, engage in the FR version of moral equivalence and generally engage in thinking reminiscent of the "cycle of violence" crap put out by the Lefties and the Frence in relation to the MidEast.

[RiflemanSharpe]

With all the good paying jobs going overseas how do they expect us to buy what they sell?
Isn't that a bit of overblown hyperbole? IBM has well over 100,000 high-paying jobs in the US, and they are adding more.

Others on this thread are suggesting boycotting IBM - wouldn't that be a foolish and shortsighted thing to do?


I already do boycott them.

[cpst12]

>>Others on this thread are suggesting boycotting IBM - wouldn't that be a foolish and shortsighted thing to do?


On the contrary, it would be an excellent thing to do. What better way to force companies to behave the way you want them to do?

Waiting for politicians to do anything about it, isn't going to happen. The race to the bottom isn't a race you want to win.

People that care about this issue need to pick a few companies to make an example of, and organize a huge well planned boycott of the offending companies. When they loose 10-15-25% of their business for offshoring, suddenly it won't look so profitable to be offshore.

Not sure if IBM is the right one to boycott, because I don't know how many mainframe purchases are done here on FR...

[RockyMtnMan]

You make the assumption they (foreign competitors) have the talent and innovative drive to beat us in these markets. They will only have the know-how if we move the jobs overseas and train their third-world arses.

These moves are short-sighted and will create a whole new classes of competitors in the future. I predict these same companies will go whining to the fed about IPR and copyright infringements in the near future. We'll here them say "something must be done, we can't compete with them". Right now it's the techies who are suffering, later it will be the short-sight corporations facing their new low-overhead competitors.

[templar]

These are just dirty "buggy whip" jobs that we don't need or want in our country. This will free up American labor to persue better, more important things.

[The Electrician]

I already do boycott them.

If large numbers of people followed your lead, it would result in the loss of perhaps tens of thousands of high-paying American jobs. IBM is a major component of the Dow Jones Industrial average. If a major boycott took hold, the impact would likely be felt in a sinking DJIA. So, it would appear that your goal is to hurt the American economy and job outlook. Why would you want to do such a thing?

[The Electrician]

On the contrary, it would be an excellent thing to do. What better way to force companies to behave the way you want them to do?

That's a counterproductive strategy. It would have the effect of damaging the American economy and destroying tens of thousands of high-paying American jobs. It would have the effect of boosting the fortunes of foreign competitors such as Fujitsu and Siemens. Rather than "forcing companies to behave", you have issued a prescription for killing the goose that lays the golden eggs. That is the usual Democrat strategy - it's surprising to see it wholeheartedly embraced by some factions within FR.

[RiflemanSharpe]

TO send a message, I am a sys admin. I just placed an order for a server, I am replacing a IMB with an HP.

[Jim Cane]

If large numbers of people followed your lead, it would result in the loss of perhaps tens of thousands of high-paying American jobs. IBM is a major component of the Dow Jones Industrial average. If a major boycott took hold, the impact would likely be felt in a sinking DJIA. So, it would appear that your goal is to hurt the American economy and job outlook. Why would you want to do such a thing?

IBM isn't the Dow and the Dow isn't the economy.

[Mo1]

Nice of you to give the Pakistanis a pass, engage in the FR version of moral equivalence and generally engage in thinking reminiscent of the "cycle of violence" crap put out by the Lefties and the Frence in relation to the MidEast.

I didn't give any one a pass .. I simply said they keep threatening to nuke each other .. I never gave a reason why this is happening

But hey ... Nice try in accusing me of something I didn't say ...

[cpst12]

>>you have issued a prescription for killing the goose that lays the golden eggs.

If the goose is laying its golden eggs in India...good riddance...I have no doubt that if big business gets the message that US consumers would rather by from companies that don't send their jobs offshore, somehow they will manage to survive.

[bassmaner]

It's a safe bet that IBM does millions (perhaps billions) of dollars worth of business with the fedgov. If the feds had any cojones, they would threaten to sharply curtain future contracts with IBM if they follow through with this plan that has detrimental short term economic and long term national security implications.

[alaskanfan]

I hope they start with C.E.O. and C.F.O.

[oceanview]

this is like posting "the sun rose today". tech companies do this month after month, 100s, 1000s, 10000s. I am surprised they made the information public.

[drypowder]

For the sake of the well being of this country it's prudent to consider the future effect's of Gov. policy and industrial maneuvers that have an immediate effect on our economy. I am not an economist but I can't help to think of the old saying that "The chickens will come home to roost" must not entire the minds of the decision makers that are essentially selling out this country. I'm going to guess the that the reason the sell out continues is that they (the decision makers)will have their pockets filled and out of the picture by the sound of the first cluck. If this country is to survive it makes since that the decision makers need to be focused on the well being of the country and not themselves. How to get that to come about will require force of some sort because it is obvious their greed and power keeps them from doing what is right for the sake of the whole country.

[Orangedog]

TO send a message, I am a sys admin. I just placed an order for a server, I am replacing a IMB with an HP.

You may want to take a look at where Carly has moved HP manufacturing and support since she took over. They are no better than IBM.

[marshmallow]

With all the good paying jobs going overseas how do they expect us to buy what they sell?

One can easily turn that question around.

Would you like to pay more for something because those who produce it receive high salaries? Or would you be happy to buy the same product at a lower price when produced by lower paid workers?

Most everyone around here loves to trumpet the values of undiluted capitalism and the virtues of the market, severed from any social or human principles.

Well this is it. Somebody in another country can do your job for less financial reward.

Enjoy.

[Paul Ross]

Yes, in part, that is true. Those reforms are called "Tariffs" which is something the Republicans advocated unceasingly for 120 some years. The part that is wrong, is that once 'OUR companies' have relocated all major manufacturing and software operations abroad, they are no longer 'OURS'. They will be THEIRS. [China's and India, et al.] And they will not be so polite about letting them leave as we were.

[Arizonie]

TO send a message, I am a sys admin. I just placed an order for a server, I am replacing a IMB with an HP.

uhhhh...HP is the worst for outsourcing to H1B's, laying off tens of thousands of workers in the past 2 years...how does this fit into the message you're trying to send?

[The Electrician]

If the goose is laying its golden eggs in India...good riddance...

You make my point for me. Rather than devising a strategy that could lead to more high-paying jobs in the US, you have endorsed a Democrat-inspired slash-and-burn strategy which would do the opposite.

Imagine, for a moment, that you were interested in adding high-paying American jobs rather than in destroying them. You might then be inclined to apply your energies towards productive measures such as:

- helping to make American business more competitive by reducing government burdens such as over-taxation and over-regulation

- working towards tort reform to reduce the "lawyer tax" disincentive, etc.

Instead, we see other posters who are, for example, engaging in misguided efforts such as steering their purchases to HP, which is embarked on a headlong rush to overseas outsourcing and to misusing the H1B program in order to keep American tech worker salaries low.

[The Old Hoosier]

These moves are short-sighted and will create a whole new classes of competitors in the future.

Which will benefit those of us who buy PC's.

I'm not for keeping a few quaint jobs here in the U.S. at the expense of overall economic development. The money that is ultimately saved by consumers--especially business consumers--through this outsourcing will be invested in new companies and new technologies and will thus create more jobs and real economic growth. To protect jobs that are better sent elsewhere does not help economic growth and is counterproductive.

Besides, IBM offers a great severance package. Some of these programmers--the more talented ones--may go on to start their own businesses with the money, and then employ still others.

[Non-Sequitur]

Imagine, for a moment, that you were interested in adding high-paying American jobs rather than in destroying them.

Your scenario makes no sense whatsoever. Why would any company want to add high-paying jobs of any kind here if they can get the work done by low-paid people overseas? Cut taxes, cut regulations, cut what you want. All that would be is additonal profits on top of the cheaper foreign labor.

[The Electrician]

IBM isn't the Dow and the Dow isn't the economy.

Go back and follow the chain of posts, and you will see that I was responding to a post that advocated selecting a few companies and boycotting them in order to destroy 10% to 25% of their business. Are you claiming that that would not have any effect on the Dow, and/or that would not have any effect on the economy? Boycotting our way to economic growth is a bit like taxing ourselves to economic growth - both are Democrat tactics that are sure to produce the opposite.

[The Electrician]

No, you have posted a non-sequitur. There's plenty of evidence that outsourcing to lower-wage regions does not always reap the claimed benefit of higher profits - in fact, there are plenty of stories of companies that have outsourced only to find out that the result is lower quality, loss of control, less ability to respond quickly to the changing demands of the marketplace, and consequently lower profits. My suggestions, if followed, would reduce the differential in cost of doing business between the US and offshore, which would magnify the importance of factors such as the ones that I mention here. And, that would lead to less offshoring and greater US job retention and creation.

[Non-Sequitur]

There's plenty of evidence that outsourcing to lower-wage regions does not always reap the claimed benefit of higher profits - in fact, there are plenty of stories of companies that have outsourced only to find out that the result is lower quality, loss of control, less ability to respond quickly to the changing demands of the marketplace, and consequently lower profits.

Sure there is, but that hasn't stopped more and more companies from outsorcing. Since corporate America is focused only on the short term financial statemtent rather then the long term returns then they will continue to go where the work can be done cheaper, regardless of whether it is done better.

[snippy_about_it]

You're right. The decision makers only think about how to better themselves in the immediate, not the future of their children or our country.

[staytrue]

Slave labor is a wonderfull thing...especially in countries that have well educated slaves

You discredit yourself when you describe people working for wages that are low by US standards, but provide a decent living by india standards, as slave labor. They are anything but. The cost of living in india is cheap enough, that they are very middle class.

My brother worked on a farm in 1960 and made a very repectable dollar an hour. Of course the cost of living was low back then, just like it is in India now.

[The Old Hoosier]

This outsourcing will help PC buyers. It will help American small businesses by lowering costs and freeing up capital so they can expand and hire more workers and devote more money to research, to finding the next generation of technology. The money saved nationwide will help create whole new businesses and even whole new industries. It will have the same effect as a tax cut.

You all have the mentality of government workers who will protect their fiefdoms at any cost. Democrats fight the outsourcing of these government jobs, which are wasteful and unnecessary, even though it could result in savings to taxpayers that would create more private sector jobs that actually serve a useful purpose.

[unixfox]

Is it just me or do I hear that giant sucking sound again?

[SAMWolf]

Until the politicians and bureaucrats jobs are threatend with being sent overseas or being done by H1b workers, they won't give a rat's ass about anyone else's job.

They're protected and get richer and grab more power, that's all that matters to them.

[88keys]

Everyone should have to read your post...!

[RockyMtnMan]

There's a much bigger world outside the "PC" market my friend. We are not talking about $400 PC's we're talking about multi-million dollar software development/support contracts.

You won't innovate squat without the right talent domestically. It's just a matter of time before some big Indian firm starts competing head-on with IBM global services cutting into their market share.

The IBM'ers that start their own companies will one day have to compete with the Indian firms that IBM itself is creating. Apply your logic to IBM India, when they leave to start their own companies who do you think they'll be competing with?

[The Old Hoosier]

when they leave to start their own companies who do you think they'll be competing with?

You're being very short-sighted. The competition will, again, help American businesses by cutting their costs. You are viewing the American economy as something static and unchanging, which does not develop to meet the circumstances, thus improving our standard of living constantly over time. You are wrong to do so.

We don't need to have a monopoly on programmers in order to compete globally. Besides, we would not be able to have such a monopoly even if we wanted one. What are you going to do, erect tariffs against programs e-mailed back to the U.S.?

[Mamzelle]

re: What are you going to do, erect tariffs against programs e-mailed back to the U.S.?)))

Well, we could put a nice surcharge on the money going out of the country to India.