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IBM Moving Developer Jobs Overseas
helixcode123 writes "According to the New York Times (also on Yahoo News), IBM is planning on moving a substantial number of high level jobs overseas to 'India and other countries.' IBM argues, in essence, that they need to do this to stay competitive. The article
quotes that Forrester Research '...estimated that 450,000 computer industry jobs could be transferred abroad in the next 12 years, representing 8 percent of the nation's computer jobs.'"
...I'll move to India. That'll fuck em' over!
My only question is, if you have questions with the code, aren't you going to need a translator for the comments?
int a; #Es un variable para el funcion de la red.
American Programmer: Buh?
so its okay to outsource jobs to reduce costs but not okay to lower salaries of the top management to reduce costs?
Don't Tread on OpenSource
8 percent!
That means that 92% of us will still be around.
Yippee!!
ee
Antiquated competence won't be a job skill forever.
Okay, I'm in Seattle, and it's already a pretty horrendous job market here - I'm reduced to working a temp job for $10/hr (not in my industry). This is gonna make things even worse. So what's to do? Do we have to have a 'Made by U.S. Programmers' label for software packages?
great! more lost jobs. any city anywhere should yank any tax breaks they are getting. its hard to work with someone thats hours are soo offset from your own.
My boss told me it's a good thing that these jobs are going elsewhere since it gives America the chance to support these developing countries, and allows us to move to other areas. But what I still don't understand is what areas are we supposed to be moving to?
No todo lo que es oro brilla
We'll be telling our grandkids that the US actually had an H1B visa program to encourage tech workers from other countries to work here, not the other way around. And they'll say
"Grandpa, you're pulling my leg!"
SCO to Hell
But good for IBM. I mean this, but I know it won't be popular. By IBM cutting developer jobs, they will be able to stay competitive in more markets and increase the GDP of the nations they are moving operations to. That means increased buying power for that nation, and in turn, everybody benefits from selling to that nation.
It also means that while developer positions are harder to come by, more jobs in other sectors will be created to satisfy the increased revenue IBM has available.
So, before you flame IBM try to see how this isn't a greed manuever but something that can benefit more people outside of the software development industry.
Dacels Jewelers can't be trusted.
Welcome to capitalism. You must be new here?
As an Electrical Engineer, I'm thoroughly convinced that defense jobs are the only ones that are going to stay in-country. Might as well jump on the band-wagon now. Viva le Tomahawk!
The meek might inheret the earth, but they'll be in India.
I need to make sure I have this right. If we give the rich a tax break, they will create more jobs. Those jobs in turn will be transfered overseas where the rich will again see an increase in their capital investments which are now taxed less. Ok. Just making sure I understand. No further questions.
You mean to tell me that International Business Machines might employ people in other countries!!!?!?!!112@
That's just so wrong!
autopr0n is like, down and stuff.
Well, I guess it depends upon the industry. For years German and Japanese companies have been moving automobile production to the US because the labor and benefits are much cheaper, while IT is being more and more phased out to India and other countries.
Visit Jonesblog and say hello.
Don't be too perturbed if they make fun of your American accent though.
"dope will get you through times of no money better than money will get you through times of no dope"
Ok software companies already have a problem with good work code here in North America.
If we go by the logic that clothing made in overseas sweat shops is cheap and crappy how will software produced over there be.
If companies have to maintain profitiablity, and developers are cheaper in other countries, what choice do they have except to export those jobs? Sure, it makes life harder for the developers in the US, at least for the short term, but what if exporting that work enables IBM to spend money on R & D that provides even more work for state-side developers in the long run? I'm just thinking there are some benefits and some disadvantages with just about any solution IBM chooses.
And you can spec that comments must be written in English. Given the pitiful nature of most comments anyway, who cares?
autopr0n is like, down and stuff.
'ta
What we're pretty much seeing, yet again, is the valuation of the company over the individual. People like Larry Ellison and Bill Gates and pretty much every other CEO in the tech industry are getting richer and richer at the expense of the people who keep them there.
Where will this end? Equilibrium? I honestly can't see that happening. I'm pretty sure you could ship every technical job to India and China, and their cost of living, and hence their salaries, would still undercut the US by a massive margin. So what's to stop the flow? I think that legislation might be the only way. Hey, Mr Gates, if you want to use this country to stay rich, then you have to pay it back, your workforce has to be a certain percentage American.
Without that sort of thing, I worry, I honestly do. All I can try to do is be the best in the global market, not just the local market. But how good can I be. You can hire 5 or 10 Indians for what it takes to keep me in a job here in the States. I just can't compete any more.
Right now businessmen are eager to outsource a 80k / yr job to a 10k / yr position. (Forget that 5k shit in the Times, you need more developers and there are hidden costs, in delivery delays and communication overhead.)
What are the boards going to do when they realize you can get a CEO for only 100k / year in India or Russia ? If Ed Whitacre (SBC) was replaced, the 82 million a year savings (yes, look it up) would nearly be enough to make SBC profitable, for the first time since they hired him !
Corporate Boards themselves are much cheaper overseas; in some cases you only have to go as far as Canada to get boards that work for a tenth the price of boards in the United States.
These changes are the inevitable reflection of the market, and passing laws against it just damages our competitiveness. American CEOs will always be able re-train to other jobs to stay competitive.
Best of all, the savings to the bottom line can be feed into tax-free dividends, which help keep the stock market strong.
The IPs of those who respond against this post or mod it down will be reported to Asscraft as Al Qeada agents.
Couple of notes on this:
1. Brush up your Hindi/Cantonese/Tagalog/Mandarin.
2. While we in the US can keep crying about this (and will) don't you think it is a good move for the globe? This is practical wealth redistibution. Instead of 1% of the world population, now the wealth generated by IT can be shared with 20-30%. Isn't it just fair? Specially if you notice that this is not only an IT related phenomenon.
Effactively the US corporate giants (mostly Republicans) are doing what the liberals have been preaching for a long time (not Democrats, but Greens).
What do ya know?
Code poet, espresso fiend, starter upper.
I'm not going to get stuck like people in the muscle industries have in the last few decades, clinging to the shrinking number of jobs for less pay for more work. I'm still in a good position, it's time to start gearing up to switch to an industry that's not getting shipped overseas.
Whadya think? Management's probably good -- those fuckers will never reduce their own numbers or salaries, but I hate sitting in meetings and being useless. Health care? Big barrier to entry, though... What else isn't going away?
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
Do we have to have a 'Made by U.S. Programmers' label for software packages?
Honestly, did you 'look for the union label' before buying your clothing? Why do you think anyone else is going to care if their software was made in the USA? Ultimately, they just want the lowest price.
The situation sucks, but I'm not sure what we can do about it. Maybe tax breaks for companies that hire American workers in America, but even that would probalby not helpt too much.
I'm an American. I lead a lifestyle that is substantially better than most of the people on the planet. Outsourcing of IT jobs to countries like China, Russia and India is threatening that lifestyle, and if I'm not careful it could all go right down the drain.
I say: Good. It's about damn time.
Why does America deserve to have all the wealth that it has? If someone in India can do my job at 1/10th the cost, why exactly should anyone pay me to do it? Simply to support my American way of life? No. The American way of life is not a birthright. It has to be earned. You earn it by doing what those guys in India and China and Russia can't do. You earn it by innovating, and by taking risks. You earn it by seizing on oppertunities that those guys simply do not have access to.
It's time to wake up people. Being able to sling a little code, set up a webserver and talk your way around a design meeting is not going to cut it anymore. You need to get off your ass, put the time in on the weekends and:
1) Identify what it is that you can do that cannot be done by anyone else (or at least, anyone who is willing to work for your salary)
2) Train yourself to do it well.
Otherwise you will not have a job. Simple as that. Just like during the manufacturing boom in the 50's and 60's, America (and Western Civilization in general) had gotten fat and lazy in the last few years. Now there is simply no reason why you are worth 10 times more than the rest of the world. So you had better come up with a reason, or move to China.
Repeat after me... Do you want fries with that...
It's always a good idea to have a backup plan.
The race isn't always to the swift... but that's the way to bet!
At some point the US will need to adjust to economic conditions outside the US. While in the past computer programmers and administrators were highly educated people, now community colleges and trade schools are pumping these "trained" people out. In addition to this, programming is not the work of a small squad or an individual anymore, instead it is a large conglomerate of people, and parts of software - think backend. The only thing that really needs a US/English cultural touch is the interface, for the most part (I in no way mean to minimize the importance of the interface). But thats it.
An educated anybody can really do these jobs now. The investment in education is nowhere near as high anymore (no programmer will be paying off $80k for school, think 2k at most at CC), and the decentralizing of software development has made the language barrier a thing of the past.
So now what?
Stop Cribbing, Guys! Get your skills upto date....there is no dearth of jobs for quality workers.
That's like saying "Learn to swim better guys, you can out swim this tsunami!" as the tidal wave breaks over your head.
You think they don't have quality workers in India? You think the USA is the only place which has quality workers?
Now the game is all about price anyway, and we're way overpriced compared to quality workers in India. Time to learn how to fix cars or teeth.
While it is true that many technical jobs have been moved to India, the best Indian engineers actual come to the US to have jobs here.
CBS's 60 Minutes had a segment on students of the ultra-competitive Indian Institute of Technology a while ago. And apparently all the graduates from IIT want to come to the US.
Therefore, I have the thesis that technical jobs in the US are simply getting more and more advanced, whlie "easier" technical jobs are being moved overseas.
I wonder if the time zone difference might be seen as an advantage, i.e., as a way to have skilled, white-collar employees working on a problem 24/7 without having to pay them a premium for working overnight? The second page of the article states:
Only Women Bleed (Sex, Sharia remix)
Yet when our "business model" (i.e., our strategy for making money) is challenged by a bunch of cheap programmers in some other country, do we "get used to it?" Do we bite the bullet and accept the fact that the world is changing, and programmers have become a cheap commodity? No. We sit here and whine.
We're all terrible hypocrites.
...named Dilbert.
I'm a consultant, and most of my work does not require me to be physically onsite -- although my clients prefer it. So what should I do in response to a disappearance of nearly 1 in 10 positions overseas?
Maybe I should move to Bangalore, use my established clients to continue work in the US, and use the drop in my own housing/personal/family expenses to remain competitive. My old college roomie did a version of this -- telecommuting to consulting gigs in Los Angeles from a very nice house in Arkansas. I can think of half a dozen places to go that wouldn't suck at all. Hell, given the way the state & federal economy's been run into the ground here in the US ($450B+ deficit!), maybe my kids will get a better public education abroad.
Then again, I find that if I drop the price for my services below a certain level, then the client no longer respects the work as coming from an expert (and thus exclusive) source. It's sad to think that I tend to get the most abuse from clients to whom I've given cut rates. Maybe I should raise my rates? If I keep my fees well above the internationally-outsourced folks, but below the top decile (easy targets for that 8%), I should be in good shape, no?
J
I think not...(*poof*)
The key is "devotion to the interests or culture of one's nation". This is what we should be doing in a business sense. We rob our citizen's of jobs in an effort to enrich few.
Therein lies the problem, eh? Capitalism, i.e., "rob[bing] our citizen's of jobs in a effort to enrich few." is at the heart of our nations culture. You can't really blame IBM for the fact that American culture is - erm - cannibalistic.
no comment
close.
What will happen is that the middle class will fade away, and we all will be liuving in run down shanties thankfull for the pittence they pay everybody in the world.
The Kruger Dunning explains most post on
In my opinion, computer programming should no longer be considered a "high-tech" job.
Sure, there is science in the mix (mostly logic, math), but how many programmers actually make use of this stuff on a daily basis? Most programming that is done in industry is relatively routine stuff;
Code, Run, Debug, Repeat.
Only a lucky few are developing completely new algorithms, and doing what can really be called 'research'. The rest are just engineering jobs, if that.
Now the former, research-related stuff, will stay in the country. Our universities and research are still much better.
The latter type of programming, which unfortunately is what most people are doing, like writing VB programs to solve relatively simple tasks and such, cannot compete.
There is no reason to keep those jobs in the country if someone else can do the same thing cheaper.
And that's just fine with me. For nations like India, it's still one step up on the ladder of technology, and for us, it's a motivation to keep pushing upwards towards the new areas that really are "high-tech".
...it's very good think. I live in Poland, where unemployment rate is as high as 20%, 50% of university graduates are unemployed, and where I work as a system administrator for about 1000 zlotys (less than 300 USD) monthly and last payment was from March.
I have a Masters Degree in Physics, and I am finishing my Masters thesis in Law. I'm 25 and still living with my parents in a flat (let's just say, that renting one room flat costs over 500 zlotys (half of my pay)) and I consider myself very lucky having a place to live, a job, and at least some perspectives.
So whenever some US corp. is moving out of US, we people from underdeveloped countries, are rather happy, as this means better future for us.
When in doubt, go to the library. - Ron Weasley in Harry Potter and the Chamber of Secrets
Why do you think they are moving the jobs to India - to better distribute the wealth??? They are doing it because it's cheaper!
Following your argument, we should expect deepening discounts on IBM software and services, right?
Face it, this is about concentrating wealth, not spreading it around...
Jan
What makes you think that we care whether IBM increases revenue?
eat shiat and bark at the moon
After reading the usual bitching and moaning about tech jobs going overseas, it struck me odd that the same people who are proponents of Free (not necessarily *free*) software are some of the loudest whiners. Ok, so you can charge for Free software, but once it is in the wild, then what? Well, you are shit out of luck! Unless you can talk a user of your software into a maintenance contract or whatnot, you are never going to see another penny from your software unless some do-gooder decides to pay for it even when they can get it for free.
Guess what? If I am a large multinational that makes, say, CRM software, and along comes some Free and kickass version that my customers start using then I start fucking laying people off or shipping my work overseas. Why? Because I am not making as much money. That in itself may not be too bad -- a little competition is a good thing -- but in this case now *no one* is making any money. Whoohooo!
People may want to see MS go down, and I can't necessarily say I am not one of them. However, stop for a minute and think of the mind-numbing and crippling effects that would have on the entire worldwide software industry. There are thousands and thousands of companies that make their money from supporting MS products, writing add-ins, etc... In the Seattle-area I would venture to guess that about 95% of the solutions providers and about 80% of the development shops rely on MS. MS goes away? Thousands and thousands of jobs go away as well. Fun fun.
</RantingTangent>
For all those who have been wailing about loss of US jobs; here are some interesting things to know:
.... Service-producing industries-including finance, insurance, and real estate; government; services; transportation, communications, and utilities;
... these jobs account for 8 out of the 20 fastest growing occupations in the economy.
t hal/5.2.html
:)
(source: http://www.bls.gov/oco/oco2003.htm)
Employment
Industry
**The long-term shift from goods-producing to service-producing employment is expected to continue
**Employment in the goods-producing industries has been relatively stagnant since the early 1980s
**Nondurable manufacturing, on the other hand, is expected to decline by less than 1 percent, shedding 64,000 jobs overall. The majority of employment declines are expected to be in apparel and other textile products and leather and leather products industries, which together are expected to shed 131,000 jobs by 2010 because of increased job automation and international competition
**Mining. Employment in mining is expected to decrease 10.1 percent, or by some 55,000 jobs, by 2010.
**Computer occupations are expected to grow the fastest over the projection period
**Declining occupational employment stems from declining industry employment, technological advancements, changes in business practices, and other factors. For example, increased productivity and farm consolidations are expected to result in a decline of 328,000 farmers over the 2000-10 period.
I know I have used a few numbers from the report. For a reason. Before complaining about loss of job/lack of job, PAY ATTENTION TO THE TRENDS IN EMPLOYMENT. Try to see which job sectors will not be affected too badly by outsourcing. Try to see if your interests/ abilities/ education can get you a job in one of these fields. Stop complaining over nothing.
And for those who think people in India cannot speak English:
In terms of numbers of English speakers, the Indian subcontinent ranks third in the world, after the USA and UK. An estimated 4% of the Indian population use English; although the number might seem small, out of the total population that is about 35 million people (in 1994)
Source:
http://www.scholars.nus.edu.sg/post/india/hohen
Just for sake of clarification: Job loss/ lack of job is BAD. For me, for you, for everyone. The important thing is that instead of blaming the corporations, tey to THINK how you can 'beat the system'. And also, don't complain when you find that half the things you buy are "Made in China"
Think of what happened to this country when all the "great" manufacturing jobs and textile jobs and all the other jobs went to foreign nations over the last 50 years? We pay them in dollars and ultimately, the only place where you can spend dollars is in the USA. The world gets rich with our money and so do we. Thats economics kids. Americans have had this bitch for a long time and we end up crying all the way to the bank.
Now if it is my job or your job, its a damn stark reality. Salaries may plateau or go down. Too many became IT personnel in the 90s, they will get weeded out. But there will always, always be service industry jobs in this country for lower wages. If evolution weeds you out you may find yourself in one. It sucks to be you. But thats freedom folks, freedom to succeed, freedom to fail.
Remember one thing about economic collapse, it will happen only if those in power allow it and they will only allow it if it is to their benefit. I can't see this as likely anytime soon. Have faith in our little corporate plutocracy. And work harder, stop reading so much slashdot!
Face it, technical jobs are becomming increasingly a commodity that can be filled as easily by someone in Bangalore as Boston. So, when the Joe CEO of Moneygrubberscorp realizes that he can slash costs by many times through overseas outsourcing, what do he's going to do? That's right, he sees that lower costs = higher profit = more money for Joe CEO, his cronies, and the all mightly shareholder. Almighty capitalism at its finest!
Unfortunatly, that means that means that the middle class workers he just eliminated are SOL. Their piece of the pie is gone, eaten up by Joe CEO so he can afford another villa in Switzerland. Poor John Programmer now must try to find another job - but unfortunatly, no other company can justify the cost to hire him.
As more companies outsource, those who don't, out of patriotism and respect for their countrymen, have higher costs, realize less profit, and lose their competiveness. Eventually, they will either: A) Be eaten by Microsoft / Oracle / etc B) Go out of business.
What does this mean? IT MEANS THAT SOON, THE ONLY COMPANIES LEFT WILL THE ONES WHO HAVE OUTSOURCED ALL THEIR WHITE COLLAR JOBS. John Programmer will have to find something that has not / can't be outsourced, such as the trite example of flipping burgers. Thus, bye bye middle class.
Who wins? Joe CEO, Moneygrubberscorp, its shareholders and all the other's companies like it make out big time by pocketing the difference between the salaries of thousands of John Programmers.
What can be done? I'm not going to preach here (I'll leave that for another time). Just be aware that this is happening and ITS ONLY A MATTER OF TIME BEFORE IT HAPPENS TO YOU!
"Why does America deserve to have all the wealth that it has? "
because we deloped global capitalism.
Because we set the standar for other to achieve.
"1) Identify what it is that you can do that cannot be done by anyone else (or at least, anyone who is willing to work for your salary)"
Well, that would be aahhhh nobody.
"2) Train yourself to do it well."
I do programming well. you would be hard pressed to find an area of programming I have not done. yet, I still will loose a job overseas.
Nobody has gotten fat and lazy in the last few years. That is always the perception because we work harder then most countries, but we also play harder.
well, thats a great attitude you got there, lets see what you have to say when your living under a bridge.
Hell yeah, America first.
The Kruger Dunning explains most post on
It may not be a crime, but it may also not be realistic.
There is a remarkably arrogant attitude here in the US that we Americans are born with a soverign right to get paid more than someone with equivilant skills in other countries, and the coming years are going to give a lot of Americans expecting to live better than their foreign counterparts a serious moment of pause.
IBM needs programmers. They can hire one American, or three people in another country. To a business, it's a no brainer. Sensible economics. Will it have a downard effect on the standard of living in the US? Yes, probably. Maybe we're due (or overdue) for that to happen.
So they're probably less qualified too? I feel sorry for the future programmers who will have to fix all the bad code that is produced by cheap programmers. I know from experience how annoying that can be.
if(!cool) exit(-1);
I can dig competing for my labor costs on the strength of my skills, but I can't compete with developers who make $5,850 a year, because I can't even rent a hole in the wall in my city for that yearly income, let alone feed myself.
Do we really want to 'Flint, Michigan' the entire high-tech industry? At the very least, lets insist that only countries with similar social standards as ours can get looked at for this kind of expatriation of jobs.
Personally, I'm not interested in returning to the days of the Industrial Revolution where workers had no rights-- cause thats what it's like in many third-world countries.
What the hell, lets just expatriate everything... I'm sure we can find dollar-a-day workers for it all over there-- course by then they'll be nobody to pay the lawyers and buy the goods they want to sell to us-- at least the lawyers will all die of hunger too, thats should be a good thing.
Do not spread "09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0" over the internet, thank you.
No, but I bet my cost of living is at least 30 times higher. The falacy of your argument is that it doesn't take into account the differences in cost of living. I could not survive, to hell with keeping my house, on the wages of the people they are outsourcing these jobs to.
And where are the saved costs going? Will the price of IBM software and services go down? Or will the CEO get a fat bonus and the stockholders get a nice dividend?
Boobies never hurt anyone. - Sherry Glaser.
Is what all this outsourcing means! I've lost over 70 Lbs since I switched to my $10@ week diet. Hooray for layoff's and indian outsourcing!
It's funny to see this discussed on Slashdot, an open source advocate, where on every other day people are focused on making sure software is free. Thus making sure you don't have to pay anyone in America, or India, or anyone at all to do software development.
;)
Wake up.
At some point you have to pick a side, do you want free/cheap software, or do you want a day job that pays more then minimum wage to develop software? You can't have software be both free and cost lots of money at the same time.
IBM and others have figured this out before you did. Don't be mad, just pick another career, and try not to make that one free too
- Adam L. Beberg - The Cosm Project - http://www.mithral.com/
Remember that everybody in the world hates us.
Now imagine all the opportunities overseas programmers will have to vent that hate. To truly screw over American business.
This really isn't as bad as everybody is making it out to be. It's just another classic example of how American CEO's have lost the ability to think long-term. Companies that do this are going to get burned, badly. And when they come running back to good ole American programming know-how, just remember these golden rules:
1) Everything needs to be rewritten.
2) Every estimate gets padded out to ten times what you think it will really take.
3) Our salary now has to be based on the anticipation that these idiots are going to make the same mistake all over again. Ergo, charge three times what you would normally.
4) There are no cubicles for programmers. Only corner-offices.
And finally...
5) Every one of these corner-offices comes equipped with a foot rest.
(When the CEO complains that he doesn't have time to be a foot rest is the perfect opportunity to inform him about your twelve weeks of vacation every year and three-hour lunch breaks.)
Is this truly the only Earth I can live on?
Move the IT jobs to places with a lower cost of living, TX, OK, AL, KS, LA, NB, etc. There are skilled people in those states who won't demand silicon valley salaries.
-- Viva FreeBSD --
So, who will buy their software when all IT workers are out of job? They should move the whole manegment overseas... I've heard that CEO's are pretty cheap in Malasia.
From the article: ...the company's executives were particularly worried that the trend could spur unionization efforts.
Why aren't we unionized? What are the actual benefits, downsides, and what does it take to get there?
This is obviously the beginning of a downward spiral, so I say we should act now while we have a chance.
This is part of a larger problem in which everyone looks out for #1. If we would only concider our actions on the scope of our community (speaking nationally), things might be different... from copyright laws to workforce management.
no comment
Going to use India as an example:
First, as more companies invest in places like India, wages will rise (just as they may fall in the US).
Second, developers in India will leave American companies and form spin-offs or direct competitors, which requires more local employees, reducing the number of developers available for the US firms, also driving up wages in India.
Third, India will eventually develop a market for software, rather than just be a supplier. As that market grows, more and more Indian developers will be employeed to fill the demand, and American companies can compete as well.
Fourth, many jobs can't or won't be moved over, and IT is in general still a growing field. Computers and software are even more ubiquitous than ever, and the demand for domestic workers will still exist.
Fifth, only large companies can really afford to do this. They're usually the shittiest jobs anyway; I'd rather sand-blast my ass-crack than work for IBM. Working for a small-to-medium sized company is far more exciting.
IBM Moving Jobs Overseas
I didn't know IBM had that kind of clout with Apple. Poor Steve, did he have any say in this at all? What about his family, are they moving too?
A programmer is a machine for converting coffee into code.
And get paid $10,000/yr ?
Please.
What happens in a case like this is that a VP hears or is told by his underlings that his company can save significant amounts of money by shifting jobs overseas. He waits a bit, notices that some competitors have done so successfully. He reads a couple articles in Forbes (always enthusiastic about new trends, as their folks are terrified about missing one). They're from high-level execs from companies that have shown savings preening themselves and trying to build up their personal recognition by talking about what a good move it is.
He gets a group of people at his company to evaluate the possibility of moving jobs overseas. They, knowing that this is a pet project, work damn hard to show that doing so is profitable and hand him back the results. The company then contracts out to some company to assist in transitioning jobs overseas.
Five layers down, a few months later, a bottom level manager is stuck with a mandate that he hire only (for example) Indian workers unless he can show good cause otherwise. He doesn't really care about company money -- as a matter of fact, if he's significantly under budget, his budget for next quarter will be simply cut to match updated expectations. He only cares that the job gets done (the one thing that *will* make his boss tromp on him). He simply finds the company in India with the best reputation, and ignores cost. He doesn't care.
A couple of Indian businesspeople start a company, grab a few Indian folks with a reputation, probably bootstrapping their new (or existing) company with some foreign (American, European) people who are well-known and can give the company an appearance of strong competency.
Prices start out somewhat low, but rapidly rise. The consulting company wants to jack prices as high as possible, and the manager contracting out doesn't care about cost (up to his budget). They hit near-US prices. If managers were worried about cost, US-based contractors wouldn't be paid what they are today.
Moving jobs to India won't have a major long-term improvement in savings.
However, it will move a significant chunk of the world's wealth, which has been very much tied up in the US, over to India. Smart investors can, as always, take advantage of the situation by investing in emerging firms overseas.
May we never see th
I ndia
B ecause of
M oney
I've seen lots of postings here raving of how great capitalism is, and that giant sucking sound of high standards in a race to the bottom is nothing we should be worried about. Here is a little secret: communism failed because it is an unattainable goal, but so is true free market capitalism too.
The US has nothing more than a demo(ney)cracy, if you can't pay for it, you just don't get it. I think this trend will just have to continue longer and longer until the flint michigan scenario plays out before people stand up and wonder what happened to their life style and demand that something be done about it.
It's fine and well to outsource and cut 450,000 jobs, but at the same time they are doing irreprable damage to the economy. These same 450,000 people will not be around to buy products and software which will in turn cut the contracts that IBM may be getting for it's products. And the vicious cycle continues.
Economy is a complex web, by sending more money overseas, IBM is seriously damaging the domestic economy and should be taxed accordingly. This tax will be used to pay the unemployement, job placement fees, etc for the multitude of workers out of work.
India, China and many other countries bordering on poverty in many regions will find workers that will literaly code for food. This will be seen as immediate profit for IBM (or other outsourcing company). What they never account for (I have come to the conclusion that most CFOs cannot see further than the next quarter) is that in the long run this will cost them way more than the money they saved.
I have worked at three different companies that outsourced some code to India and China. All three were utter failures.
In one case, their representatives here were making claims that they have PhD level people on their staff and can produce almost bug free code (salepeople are universal liars). In this particular case the company "had" a PhD that consulted with them, but most of the staff were people fresh out of college with a BS in CS or even worse people who took some CS courses and were sitting around collecting wages for the company and for themselves.
Well one fine week a co-worker was visiting India (his parents live there) and decided to drop by to check on their progress. He could not explain the chaos that caused. Their state of the art facility looked more like a low tech sweatshop, the owner quickly did a song and dance and took him elsewhere.
When it came time to deliver the alpha for review, they claimed they would need few more months and blamed our requirements (requirements were drafted and never changed thru the life of the project). It was a very simple data mapping of SGML to HTML (we did not have much faith in them and had 2 guys working in parallel just in case). Well months later we still got more hand waving and more complains and request for more time. At this point out internal version finished beta testing and was ready for official testing.
Well, when the executive who decided to go overseas found out about this "mutiny" he immediately ordered our project scrapped, asked for people to be reassigned and wanted to see heads roll. If the CEO did not find out about this debacle most people would have been fired and with correct spin the overseas project would have been made cost-effective.
After all was said and done, the Indian company was given an ultimatum of 1 month to deliver a beta product or else. A month came and went and they could not produce anything. We used the internally developed product while execs fiddled with numbers to justify the overseas loss.
I am sure there were many successful projects that were produced by Indian companies (I have yet to encounter one). I think some of the best developers India had to offer came to the US and despite the tough times, companies are not giving up their good people.
Admitingly, I haven't had much work experience. But in the couple jobs I've been at, I've never seen 'anyone' rewarded for working hard. It was always people who stabbed their co-workers in the back, or took extended lunch breaks to smooze the higher ups who got the brownie points. Are there actually places out there where the managment is so un-dilbert'ish that working hard can actually get you positive attention?
Everything will be taken away from you.
that can spell worth a damn? Or who can get they're, their, and there right? (obviously not many slashdotters, to read a few posts) Or, for that matter, two, to, and too? Or than and then? Or affect or effect?
;>
I work in an industry with a considerable population of well-educated persons from India-- and I know a heck of a lot of Americans (being one myself, and having grown up here, ya know). One of my co-workers' children has far better grammer and spelling than the average slashdotter (i.e. knows and understands the above grammer items, and can spell very well). He obviously hasn't been studying English for 10 years, given that he's only nine.
My point is that people in the US whine and moan about jobs going overseas to "less educated" people-- while the average American high school student can't even find Iraq on a world map. If Americans want to compete globally, they have to do more than just go back to school to get a degree for "life experiences"; they're going to have to actually get smarter and work harder. If stating that bluntly makes me an asshole, so be it
1984 was supposed to be a warning, not an instruction manual.
How do you think third world countries grow into places where workers and citizens have rights? You're posturing as someone concerned about developing nations, but your argument seems to be that we should only allow Sweden as an outsourcing country.
Good jobs empower workers. $6000/year may be peanuts here, but are you so naive to think that isn't an excellent salary in much of the world? As these contries develop, they'll be able to compete more strongly, and their incomes and infrastructure will improve. Complain if you want about the effect on programmers here (I'm one too), but don't pretend it's out of concern for other nations.
Why should a company which is based in the U.S. be allowed to benefit from the infrastructure here while offshoring jobs? Why should the company get a free ride when their employees no longer pay U.S. taxes or pay into Social Security, and the company no longer pays the mandatory matching contribution?
You aren't aware that corporations pay income taxes at a scale of something like 40% of their income?
ASA
All employees must wash hands before seeking equitable relief.
and hire a gang of offshore Indian lawyers for $5k/year trained in American labor laws to represent US IT workers
Vince
No, you have missed the entire point.
The reason that companies look for cheaper labor is so that they can produce cheaper product. Every dollar they can save is another unit that they can sell for profit.
A common misconception is that companies are the sole beneficiaries of increased revenue. They are already maximizing their profit. It's maxxed out. They will milk every single dollar out of the revenue that they can at any given second. Since companies are already at a maximum profit ratio for their revenue, they need to increase revenue by reducing costs and increasing output.
When these jobs get send over, it's true that some workers will get paid less... but the prices for the products go down as well. Every company that is implementing an IBM solution then saves some money in software costs. Some of that money goes to profit the fat cats, some of that money goes to expand their respective businesses. This growth caused by cheaper prices leads to more and more jobs.
Who loses? The no longer "needed" workers who must retrain and reinvest themselves. Who wins? Everyone else. Cheaper prices for the direct beneficiaries, greater growth for the companies using said products, greater P/E for the stock holders of the beneficiaries, then more jobs for the general workers.
As far as your "investor" class? Look around, we're all around. Pensions and 401k's are the largest block of capital of the planet. In fact, CalPERS typically owns 5% or so of every market in the world. That "investor" class that makes money, yeah, that's all of your workers you say are getting screwed.
This is a New World Order, it's a change from the socialistic trade practices of yesteryear for a time where the individual can do as they see fit.
Some people may be too blind to see the true effects of globalization. Too awed by the very visible negative effects, and too blind to the amazing almost intangible benefits. Everyone that loses a job that can be even kind of blamed on globalization does so, but no one goes to the store and says, "Wow, I'm so happy globalization makes it possible for me to buy three times the goods with my wages then I could have otherwise."
If globalization were truely a race to the bottom that you describe, then prices wouldn't be falling like they have been for ages. If globalization were truely the damning of the poor that you describe, then the liberalization of the Chinese economy would have been a disaster. Instead, 300 MILLION people were brought out of poverty.
300 MILLION. More humans were brought out of poverty by globalization in China alone than the entire population of the US.
The fact is, maybe the US doesn't have a competitive advantage in the basics of computer science as it did before. Then there's no reason to expect that Americans should be flocking in mass to basic computer science jobs. It's just stupid to overpay for labor like that. It's a waste of valuable resources that should be put to good use elsewhere.
Geeks may hate to admit it, but the majority of the managers hate programmers and despise the IT staff. It's very hard to find high level managers that really understand this fact. That's all fine, since they weed themselves out eventually. The more things change, the more it stays the same. There will always be someone ready to replace a failing company that is blinded by statistics and forget the value of the employee. Everything moves in cycles.
I started out as an engineer - robotics from the University of California. I even still maintain a P.E. license. With engineering tanking I went into software development since I am pretty good at it. I have my M.S. in comp. sci. Over the last few years I have focused on "soft skills" like project management, people management, communication skills, etc. Nevertheless, becoming a car mechanic or opening my own automobile detailing shop is looking pretty attrative these days. I wonder how many auto mechanics are more credentialed than those who actually design the cars? I am also an adjunct prof. at one of the local colleges. My summer course in C++ was cancelled due to low enrollment. I am not surprised. The CEOs get richer and the worker bees continue to struggle to constantly "reinvent" themselves to be economically viable.
Only the facts promoted by globalists don't hold up empirically. The "consumer class" which isn't wealthy enough to risk capital in megaprofitable hedge funds and currency speculation but is still wealthy enough to enjoy your "cheaper" goods is continually pared down.
There is some net gain around the fringes in the so-called "developing economies" (which oddly enough funnel most of their capital growth to the established markets) and there is some mild migration into the consumer class in such markets but at the same time in the established markets there is an ever increasing polarization between invest-capable and below-living-wage.
We are turning the bell curve in the devloped markets into a set of two "camel humps." On the one side are those, ever increasing in number, whose consuming power is disappearing while their hours forever increase and their wages forever decrease (see two-worker households who still need food stamps to be able to consume) while on the other side are those who find their consumer power increasing out of all proportion to the world's working populations.
No, 300 million people that were "brought out of poverty" are still in relative poverty compared to our own consuming classes, while another hundred million in formerly stronger markets formerly of the consuming classes are moving ever closer toward relative poverty all so that a few million at the top can accept the capital flowing out of the "emerging markets" in order to take a tenfold increase in their leveraged ability to speculate on the global markets for ever greater amounts of cash at the expense of the said emerging markets in a kind of perverse economic-exploitative double-whammy.
It's ugly and it's why there are kids running around in their idealism trying to stop the WTO.
And meanwhile, what the guys at the bottom know is that they lost their jobs to India (in the US) or to China (in India) or to wherever the market happens to be "emerging" next. Only in each case real wealth doesn't ever actually "emerge" for the bulk of the population.
STOP . AMERICA . NOW
Make yourself more valuable than those Indian workers by being willing to work 60 hours a week for the same salary
Working 60 hours a week, or 80 hours a week will not save your job. Please re-read step #1 carefully:
1) Identify what it is that you can do that cannot be done by anyone else
A programmer in India can obviously work however many hours per week that you work +1, for whatever you get paid -1. Working hard is not a differentating factor between you and Samir over in India.
I am NOT just saying "work harder". Not at your current job, anyway. What i'm saying is that you cannot stick you head in the sand, casually learn whatever new programming language or operating system is in vouge at the time, and expect to keep your job. You have to LOOK AHEAD and LOOK AROUND.
Looking ahead means figuring out what skills will be desirable in the next 2-5 years that would be difficult to learn overseas, and learning them. These skills may not be limited to Information Technology. If, for example, you want to be a coder, and you think that Informatics (Medicine + IT) is the next big thing (as many people do), then you might want to take some classes at your local university on medicine and biology. That's something that a coder in china probably won't be able to do. Combining domain knowledge that is specific to U.S. companies with your IT knowledge will make you more qualified that those guys offshore.
Looking around means trying to find oppertunities here in the states that are not available to overseas developers. Do you think that an overseas developer can afford the $10,000 in airfare it would take to go to a professional conference like JavaOne? You, however, might be able to make a day trip out of it, learn a few cutting edge skills, and meet a few contacts that those developers in India simply won't have access to.
In the end, it does no good to argue with me. This is going to happen, just like it did in the 70's. You can spend you time whining about capitalism, globalization and the evil multinational corporations... OR you can deal with the situation by making yourself irreplaceable. Not by working harder, or taking less money, but by thinking ahead.
This and other wonderful translations of your software coming soon.
If the government's job is to look out for its own citizens, perhaps the best way to look out for its citizens interests is to open up its markets for more competition.
Behind every producer is a consumer. If you artificially inflate the price of a good because of protectionist policies, like preventing the production process to go overseas, then the consumer suffers.
For example, if you were forced to buy $200 shoes in California because the governor prevented shoe production going to Kentucky that would make the shoes $100, you'd be pretty pissed off as a consumer.
Likewise, behind every corporation is a stockholder, who could be you or me, who doesn't get a good return on investment because it prevents the company from acting competitively. Perhaps it's not in your interest as a producer because it'll mean losing your job, but you are not the only American citizen involved in the American economy. There are citizens who buy IBM's services who would like it to be cheaper and better.
As a citizen of a fairly small first world country (New Zealand) that is very dependant on exporting and as an employee of a company not too dissimilar to IBM (although I speak for myself) I have a slightly different view.
To be pointed, to rail against this kind of move on the basis that your job will disappear strikes me as whinging - or worse. Effectively, by saying that, you are saying that your standard of living is so important that your customers and the rest of the world should pay for your comfort. Let me explain.
If the US decides to put in some form of protectionism to protect these jobs then the cost of software to your customers will increase (or at least be higher that what it would otherwise be). This increases the costs of goods and services your customers might export. Secondly, foreign companies who can make use of the cheaper labour will do that and start undercutting the high export prices you charge.
IBM doesn't really have much of a choice here. All of IBM's competitors are looking at doing the same because if they can provide the same service at a cheaper cost then clients will ask for that. In the short term, if IBM manages to move faster and do this more effectively than its competitors (something that is very hard to do), then there are some fairly good profits to be made. In the long term, if this works, then all of IBM's competitors will do the same and the cost of software will decrease. This is all standard economics.
In the even longer term everything will even out a bit more. The Indian programmers will start spending their money and so the rest of the Indian economy will start feeding off that and therefore get more prosperous. Slowly prices will rise and maybe, just maybe, India will have a standard of living equal to a first world country.
The really interesting thing about the free trade argument is that in the long term this kind of change supposedly can be acheived with the existing first world countries being dragged down (at least not too much). I'm not sure I really believe this claim though.
Now to get a little bit more harsh. The US is the largest and richest economy in the world. You also control something like 90% of the world's resources with about 4% of the world's population. You have also shown yourself more than willing to use violence to take more resources on fairly flimsy pretexes.
Exactly why should you keep on controlling this much of the world's wealth? When suddenly a foreign country works out what you do and does it better you start trying to diddle them.
In general, the road to continued wealth for a country is to have better innovation. I don't really think the US has much of a problem there.
On an individual level, if somebody can provide the same skills as you provide at a cheaper cost then you need to get better skills. This is harsh but whinging and expecting the world to provide you a living is the mark of a somebody who will find themselves marginalised fairly quickly.
Maybe your grandkids will be lucky and get into the India's future version of the H1B program to encourage tech workers to move and work there.
Seriously, there will always be a need for a highly skilled and highly educated workforce.
In case you're interested, here are some more links about this and other related issues that we have seen before.
Leaked: IBM Execs Urge Moving Jobs Offshore in Internal Teleconference
An internal recording of an IBM teleconference about moving jobs offshore was leaked (Google) to the New York Times by an upset employee. From the article: '...under increasing pressure to cut costs and build global supply networks... I.B.M. needed to accelerate its efforts to move white-collar, often high-paying, jobs overseas even though that might create a backlash among politicians and its own employees. "Our competitors are doing it and we have to do it," said Tom Lynch, I.B.M.'s director for global employee relations. He also said that 3 million service jobs were expected to shift to foreign workers by 2015 (based on a Forrester Research report, which represents about 2 percent of all American jobs) and that I.B.M. should move some of its jobs now done in the United States, including software design jobs, to India and other countries. Oracle plans to increase its jobs in India to 6,000 from 3,200, while Microsoft plans to double the size of its software development operation in India to 500 by late this year. Accenture has 4,400 workers in India, China, Russia and the Philippines.' Critics say 'schools will stop producing the computer engineers and programmers we need for the future' as a result of these moves. Listen to the IBM recording in Real format (direct link at pnm://audio.nytimes.com/audiosrc/2003/07/21/busine ss/20030722jobs.audio.rm). More at the SJMN, Inquirer, and CNN/Reuters. Slashdot has discussed Global competition, offshore outsourcing, lower cost replacement workers and the ensuing legal turmoil before.
To paraphrase from the movie Jerry Maguire:
It's not technology friends, It's technology business.
Everyone is so fixated on IBM's plans they are overlooking a very,very important fact: Nearly a THIRD of this countries population was born before 1964. This means that over the next 20 years or so MILLIONS of people will begin to retire. All sorts of positions will open. The long term outlook for anyone in the tech feild in this country is very rosy.
And most don't pay even 26%. The play games with expenses and amortization. They have no taxable income.
Microsoft, for instance, doesn't pay federal taxes. 45 billion in cash reserves, and they don't show a profit.
I'm tired of the "poor little rich people" line of the neocons. Rich people barely pay taxes. Rich corporations barely pay taxes, and as a matter of fact, can get rebates on taxes they never paid in the first place.
Only poor suckers pay taxes on their income.
Currently, outsourcing to India is about 60% of the cost of doing it in the US. This used to be more like 10% at one time, and I expect it to keep rising in time with the mantra "charge whatever the market will bear". Expect figures more like 75% when more companies start to glom onto this. It's still a cost saving to the US companies so they will go ahead with it, but it's nowhere near the saving it used to be.
All those moments will be lost in time, like tears in rain.
1. The wealth in the US is primarily held by "the captains of industry" who are the same people sending all this work away. They will continue to make money from these companies. It is the employees in the trenches who will pay the price. Even when things get bad, the majority of the people in the higher echelons are sufficiently wealthy to ride out the repercussions of their actions.
2. By definition, the amount being spent in other countries is relatively small, otherwise this wouldn't be happening. Other countries are not going to get rich off this, not even by their own standards. There will be no cleansing redistribution of hoarded US wealth. The poor will not enjoy the luxuries of American standards of living. A great equalization is not just around the corner.
3. The good old entrepreneurial spirit ensures those running the offshore development companies are looking at wealthy American corporate officers as a role model. They want a cut of that pie, and coming from less well-developed nations, and probably a less comfy background, they are probably even more ruthlessly unconcerned about stepping on their fellow citizens to get it. Consequently, you will end up with the same situation overseas, where the top few are doing well (by their standards) and their workers are doing slightly better than average, at best. This will be worse outside the US as those other countries rarely have the kinds of anti-exploitation protections in place that US workers enjoy, and it is to the advantage of the governments of those countries to avoid that kind of protection to encourage further US investments.
Middle- and even low-end managers are very much involved in budgetary concerns in large companies. The problem is, they have no choice. Where I work, it was recently mandated that MOST work (nearly three quarters) must be done by Indians. Ok, they said "offshore" so we have a few Russians in the mix, but it's mostly Indians. The costs will rise due to natural market forces, not because managers don't care. It has already been documented that offshore development costs a great deal more now, across the board, than it used to.
This problem will not affect the US alone. Read The Register. Jobs are already being lost in the UK. The India and China have more than enough warm bodies available to completely trash the economies of the rest of the civilized world. It has been said that the Japanese never considered WWII to have ended, they merely shifted to an economic form of warfare. They may have been on to something. I do not believe India has any dark intent, they are merely looking out for themselves, and I lay the blame on US companies for selling out their own people -- but I believe the US may have no choice but to take a dim view of this. Unfortunately there seems to be no good solution.
Finally, eventually the same problem will hit India. They will experience their bubble, and it won't last as long as it did here because they have less to offer. I have already seen one news story about fears in India about losing their jobs to literally-dirt-cheap offshore contractors in the Philipenes and the former Soviet republics. It's only a matter of time.
I see no end to this, and I believe it will cause severe and long-lasting damage to the US economy. And don't be so naive as to believe the rest of the world can withstand long-term major economic distress in the US.
Slashdot quality declines as the number of hot grits posts decreases. - Provolt's Law, Apr-09-2005
People keep whining about how jobs move out of the US and how living standards are decreasing in the US. Yes, they do, and yes they are. And so what? What is wrong with that?
The US and Europe have been incredibly lucky, being able to build very high standards of living on the basis of cheap labor and cheap raw materials from third world nations. But those third world nations are waking up and they want their fair share. That means our standards of living will probably stagnate or go down until those nations catch up.
And that's not something we can stop anyway. Colonialism is impractical--we don't have the resources anymore to conquer and suppress large numbers of third world nations. If we oppose globalization, our economies will nose-dive. That leaves embracing globalization. But we don't have a lot of competitive advantages anymore: folks in India are smart and well-educated, and they have lower costs of living, so of course they are going to be successful and compete with us.
Overall, this means our standard of living will stagnate or even go down until the rest of the world catches up. The best thing we can do is embrace this trend and help other nations improve their standard of living quickly.