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IBM Snags Leading Indian Outsourcing Firm
theodp writes "In one of the biggest foreign acquisitions in India in the past few years, according to ZDNet, IBM will pay an estimated $150-$200 million to acquire Daksh, India's third-largest back-office services company. The deal will give IBM access to privately held Daksh's 6,000 employees, who mainly offer call center services to 13 clients, including Amazon.com."
Under capitalism man exploits man. Under communism it's the other way around.
I've talked to some of these call center operators. I was trying to activate one of my credit cards (the automated activation wasn't working I guess), and when I was done, they asked me a few marketing questions. They wanted me to add payment protection and some other insurance options. I said that I would like to wave those options. He seemed confused by my response, and asked what I meant by waving those options. Clearly, this was not one of the responses they had been trained to deal with.
So if you're disgusted by the practice of outsourcing, make your dialog with people you suspect as being an outsourced employee as complicated or colloquial as possible.
A programmer is a machine for converting coffee into code.
I remember seeing an IBM ad during the NCAA Championships touting "IBM will do you HR for you so you can focus on your company" or some jive like that. Combine this with today's activities and you get a company that will do your little dirty deed for you, so your company doesn't look bad.
Just my $.02
Victory is gained, not in knowing your opponents next move, but in preempting them.
I understand, this is how capitalism works, and this is saving so many businesses - and probably creating a lot of jobs somewhere else. I still get quite scared by it though. Its probably just my instinct as a human to try to preserve what I already have. I mean - yeah it should be a fair world and everyone deserves a piece of the pie, And I have no more right to work than anyone anywhere else - But the idea of going from the income that I barely get by on to a wage one third of what it is now, just to compete with someone who has never experienced indoor plumbing or a room of their own terrifies me.
I understand that i have no right to the lifestyle I live now (and its not extravagant by any western standard... but I've grown quite used to it). I fear the future if even the higher skilled jobs, like IT, become minimum wage - or worse.
Not only has IBM laid off employees but they have a habit of making bad choices that all but nullify their acquisitions of human resource based takeovers. When IBM purchased PriceWaterhouseCooper's consulting firms, everything was all good, until about a month or two ago when these former PWC employees found out they were not going to recieve any of their yearly bonus (~50% of yearly earnings for many of these consultants) because IBM "didn't make enough money" It'll be interesting to see what happens with this one, whether it becomes another PWC or whether they actually take care of the employees.
Go find me an American company that has 6000 people and you can pay $150Mil for.
They're getting people for $25k a pop.
(ok, $33k if they get $200Mil, still a BARGAIN)
Wow, I didn't think too many people remembered that. When I was little I lived in an "IBM town" (there was a local plant that employed abut 25,000). After the first layoffs in the early 90's (?) where at this particular plant two-thirds of the jobs were cut (I think a lot of them were white-collar folks), the entire community changed. In my case, I would say roughly 3/4 of my neighborhood moved out within 3 years. It was interesting afterwards to say the least.
I think before if you got hired by IBM, it was pretty much assumed that you would work there until you retired. How times have changed indeed.
-- Kircle
I have a -very- smart friend who works in the bowels of IBM: The top management may be back slapping each other about how they're doing financially right now but, they're bleeding talent badly and they don't realize how badly they're actually harming the company's long term prospects (some would say, "don't care"). The capable tech folks left at IBM are as bummed as any of us about outsourcing in general but they're also pretty unhappy with the low quality of the "results" that they're getting from "teams" in India -and- China (not to mention the viruses). We have yet to see what the actual IBM customers will think of all of this but it doesn't yet look like it's going to make for better products.
Say what you will about bonuses, but 50 percent of someone's yearly salary is NEVER good business sense. There are other ways to keep the employees happy besides bonueses. Yeah, they're nice to get, but come on. Next thing you know you have a bunch of employees thinking they earn 150% of what they actually earn.
*Puts down his book on introductory Chinese and sighs...*
Back to the drawing board.
Will someone please explain to me why, if we're running a trade deficit and have been for next to forever, the dollar is still so strong compared to other currencies?
___
It's the end of my comment as I know it and I feel fine.
In the NY brokerage business, yearly salary might only be $50,000, but you might get half a million christmas bonus.
Personally, I'd rather be paid directly. (and, for the record, last year I got a bonus of $1000 or so)
But on the other hand, IBM is outsourcing your job to India.
But maybe there is consistency here. Linux = free software. India = cheap labor. They both help IBM keep their costs down.
Its a sea change from the 80s when IBM was kicked out of India during Prime Minister Indira Gandhi's administration.
To really look beyond the short-term glitter and understand what this might lead up to, you must watch Life & Debt, which chronicles the Jamaican tragedy. Once Jamaica agreed to freetrade & opened up its trade zones, in a short span of few months, its entire native diary industry & banana trade was totally destroyed ( Milkpowder was dumped at dirt-cheap prices, and MNCs like Dole undercut the banana trade by bringing in bananas from Mexico ). There are a lot of pluses to free trade, but unless developing nations like India wield their bargaining power carefully, they will sell out to corporations & lose their autonomy.
But a lot of Indians in the panel felt the American ownership of Indian firms was a good thing, and it could erase some of the anti-outsourcing sentiment prevailing here in the US. Towards the end, the panel discussion got particularly heated up with sharply polarized arguments from both sides. A host of people agreed to talk to us about the "sale of India", as one of them put it.No easy answers to be found on this one.
We have yet to see what the actual IBM customers will think of all of this but it doesn't yet look like it's going to make for better products.
It's all par for the course. Every time some new business buzz-concept comes along, every business writer drizzles saliva all over it and writes about how amazingly wonderful it is, and about getting "left behind". Every MBA reads the series of articles, and somewhere over the year of getting this stuff hammering at them, decides that they need to take advantage of the latest and greatest. Inevitably everyone moves at once, which happens too far and too fast, and as a result most of the people moving with the herd come out bloodied and worse off than they started.
Let me start in the late eighties going into the nineties. IT spending was a big thing. Huge amounts of money were directed into IT, lots of people (an unsustainable number, which now screws over all the people having to deal with an oversaturated job market) were hired, incredible amounts of money were blown on completely unnecessary products. Oracle installations and high-end hardware cost *stupid* amounts of money, but people paid it. "Computers" was a buzzword, and to "computers" MBAs flocked. Microsoft got really, really rich.
Then, in the late nineties, "Internet" hit the radar. The government was pushing it as a big commercial deal, economists were enthralled, everyone was convinced that *now* was the time to get in on the ground floor. Business rags raved about the "Internet". Sure enough, stupid amounts of money (unsustainable amounts) were committed. The dot-com boom happened...and then crashed.
Now, in the naughties, "outsourcing" has become insanely popular. If an MBA hasn't considered "outsourcing", he should have a good reason why. So we're going to shove a whole lot of people to various countries, go overboard in doing so, and burn ourselves again.
Whenever the business press catches on to something and starts to get excited, it's a really good time to run in the opposite direction.
May we never see th
It would be funny, if it were true.
Howeer, Sun has fired almost 15,000 employees in the last three or four years - including about 6,000 currently being fired. Meanwhile, they're actively outsourcing work which does include software development to India.
> Time to nuke the fuck out of India.
Well, if it were true that America attacks countries for purely economic reasons, then I guess you would see that happen.
Just as you would have seen America attack Japan in the eighties.
Fortunately, it's not true.
You seem to be missing the whole point of trading. We do not trade to give people jobs. We trade to get stuff. If other countries are willing to send us stuff without us sending them stuff (which is what a trade deficit is), that is *good* for us. It means that we are getting free stuff.
The problem is that we have many unemployed people in industries where we are in surplus. Increasing exports to India won't fix that. They won't buy IT services; they'll buy things they need, like grain or pharmaceuticals. That still won't help IT workers (and might hurt us if it increases prices of food and health care).
For unemployed IT workers to find jobs, one of two things needs to happen: one, the market for IT could increase sharply (don't hold your breath); or two, IT workers could move into fields that are hiring. Unfortunately, most IT workers would be considered unskilled labor in other fields, so we are reluctant to take the pay cut involved in doing this. Also, most industries are more interested in skilled (in the work of that industry) workers than unskilled workers.
The only thing that we get from increasing exports without increasing imports is money. Since we (as a country) have the ability to print money (much cheaper than trading for it), that is not helpful. Instead, we need to fix the structural issues with the economy (i.e. move the unemployed into industries that are hiring) and produce more stuff for *us*. That way, we get the benefits of both the jobs *and* the stuff produced.
Ok, you just lost 5,000 local jobs to a call center in India. Yep, it sucks. But half of the people that complain about the outsourcing phenomenom don't realize one very important fact that has been happening for a long time now-- These 3rd world countries have been outsourcing their best and brightest to first world countries for years. It goes both ways. the opportunities in the US, Britain and other countries are so attractive and lucritive that they are quite literally losing their most important resource- Their FUTURE -to other countries. In fact, it's so prevelant that pop culture recognizes it in shows like The Simpsons. You know, the Indian 7-11 owner?
Ok, so we just lost 5,000 $7.00/hour jobs (hello, $7.00 an hour???). In exchange we are getting hard working citizens dying for a success they can only dream of in their country. Business men. Store owners. Free enterprise.
Yes, I know some of the jobs lost are worth more than $7.00, but frankly, it's still a fair trade. Go find another one. If you can't, you're not trying hard enough... After all, they are, on less, and succeeding, in your back yard.
You need a FREE iPod Nano
Of course as with all things the idiots who came up with this plan either left the company with large stock option packages (Bill Price, VP of customer service) or got promoted. I would be surprised if an audit of the outsourcing to Daksh showed that any money had been saved at all.
Too bad you're AC, I probably won't get a response...
So IGS got no bonuses, but y'all did get Variable Pay right? Did you know Software Group made enough money to purchase Rational, but they took the purchase cost out of SWG's profit number so it looked like SWG made nothing. Hence, Variable Pay even in high-profit products (WebSphere, Portal server) was almost zilch. Makes you want to scream to the bean counters to just eliminate the program and stop lying to the new-hires about their yearly compensation.
I got laid off in December through the classic "Cadillac layoff program" (as the DBM career consultants called it). I'll probably take home more this year in (severance + unemployment + retraining assistance + lower tax bracket) than if I had just kept my job! Sad but true.
Looks to me like IBM had its high point with Gerstner. Outside that period of time it's been all dirty tricks.
I'm not saying they're surprised. Simply that consultants that I personally know have now taken a 50% paycut over what their yearly salary was at PWC, and that warrants quitting and finding a better job. Period. I don't think any of the PWC employees were all that surprised, just pissed off when it actually happened. It's not necessarily just IBM's fault either, it's partially the fault of how sales targets are tracked/sales granted. Sales that were facilitated 90% by the project manager were entirely credited to the "salesperson" that played a very tiny role in the actual sale. Thus the project manager doesn't make his sales targets, and the person in sales gets a nice fat bonus. That's corporate justice for ya.