Tax break fuels anger over outsourcing-related layoffs in Fla.

Nielsen Co., the media company known for audience measurement, has given up tens of thousands of dollars in local tax breaks this year after signing an outsourcing deal with an India-based offshore provider.

The move, which has drawn negative reviews from local officials, came after the company announced it would lay off 117 workers at its global technology center Oldsmar, Fla.

Although companies that hire outsourcing firms often try to limit the release of information about layoffs through employee nondisclosure agreements tied to severance and public statements, Nielsen was unable to do so in this case.

That's because it received property tax breaks in 2001 to build a $100 million global technology center in Oldsmar. The tax breaks were pegged to the number of high-wage jobs -- those that paid at least $52,000 -- the company created. That forced Nielsen to disclose hiring details at that facility, effectively putting the employee count of the facility on the local political radar.

In April, when the layoffs were reported locally, Oldsmar city council members responded angrily to the move, according to the minutes of one meeting (download PDF). One council member accused the company, its largest employer, of "making a joke of the tax incentive program," and another charged that Nielsen "had abdicated their responsibility as a corporate citizen." Adding fuel to the fire were local media reports, which publicized the layoffs and the council's reaction.

afaik, nielsen received about $5m in tax incentives since 2001. over those 7 years, it has continued to push jobs to TATA (which now controls tech decisions within the company... one of the major players in the tech branch is former TATA).

about 3 weeks ago, they announced internally that they were no longer going to participate in the tax incentive program (i laughed when i read it... knowing what was next). a week later, they announced another 175 jobs to be cut.

what these political leaders don’t understand is the numbers involved when you use someone offshore. those $52,000+/year employees are VERY expensive... compared to the $10,000/year TATA guy (actually, they pay more to TATA.. but that’s an expense which goes straight to india... i’d expect a bit of baksheesh back to nielsen somehow). fyi... normal IT developers run $60,000 to $120,000 in florida (higher elsewhere in the US)

the other factor the local politicians don’t get the amount of money lost to the local economy. at least 500 jobs at nielsen have been lost to TATA, at least. realizing the TATA guys that are in the US on an L3 visa are living in group homes and sending everything they make back to india, there is no spending in the local economy. that translates into 500 people making $60,000+ / year .. NOT spent in the local economy.

in the last 7 years that equates to:
total compensation: 500 * $60,000 * 7 years == $210m
total fed tax not paid: 500 * $20,000 * 7 == $70m
total net that available to be spent on local housing and various businesses:
$140m

some of these people have been with the company for 15-25 years (shocking to someone in my field)... all were told they would be given a severance package... IF they trained their replacements ‘satisfactorily’. (there’s a subjective term... and we know what that means). oh, and if you actually would like to try and get that severance package... you may end up going to india to train your replacement there. don’t want to leave your family for 3-6 months to train your replacement in a 3rd world... no problem. no severance package for you

the environment is sour, people are running scared. it’s obvious to all that if they could offshore the entire operation.. upper management would. the cube farm is like a morgue... barely a noise anywhere. once in a while you see people walking the halls.

and if there are 1700 people in that facility, i’d be amazed.

One council member accused the company, its largest employer, of "making a joke of the tax incentive program," and another charged that Nielsen "had abdicated their responsibility as a corporate citizen."

How dare Neilsen point out that tax incentive programs with a goal of creating jobs are jokes! Politicians should be satisfied with increasing investment in their communities. Trying to bribe companies into creating jobs (which are nothing but a cost to business) is foolish policy and bad economics.

As for the term "corporate citizen", don't even get me started. People are citizens, corporations are legal fictions.

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