IBM Shifts 14,000 Jobs to India

Omar Khan writes "The New York Times reports, 'Even as it lays off up to 13,000 workers in Europe and the U.S., IBM plans to increase its payroll in India this year by more than 14,000 workers.' Slashdot previously covered the black-and-blue strike, in which the union wondered, 'if other cost cutting mechanisms could achieve the same effect without cutting so may jobs.'"

Comments

Message sent, but will it be received?

[coupland]

I'm sorry but IBM is speaking to European workers very clearly here, however I'm not sure they're listening. The constant strikes, the 5+ weeks of vacation, the voting down of the EU constitution to avoid US-style capitalism. These jobs are vanishing into India because of the cost and headache of dealing with European unions, workers, culture, and bureaucracy. Frankly it's a pain in the ass, and for a market that often has little growth potential. Asia isn't just where the cheap labour is, it's also where the growth is, and the governments eager to work with you, and the best bang-for-the-buck for companies seeking to invest. Until European workers learn to compete aggressively we'll keep on hearing stories like this of companies that just shrug and say "fine, have it your way." Apologies, but something's gotta give.

Re:Message sent, but will it be received?

[yog]

And US workers. From the article:

"I.B.M. is really pushing this offshore outsourcing to relentlessly cut costs and to export skilled jobs abroad," said Marcus Courtney, president of the Washington Alliance of Technology Workers, or WashTech, a group that seeks to unionize such workers. "The winners are the richest corporations in the world, and American workers lose."

They just don't get it. The winners are the consumer who gets to pay lower prices for the products and services. The other winners are the stockholders of the corporation who get higher dividends and portfolio value. Now, we all are consumers of IBM and similar high tech goods and services--every time we use an ATM, an insurance company, a bank, a personal computer--we are benefiting from offshoring of high cost labor and parts.

I think this group that seeks to unionize tech workers needs to rethink its strategy a bit. Raising the cost of labor will not provide for secure employment, quite the opposite in fact.

I don't like to see rising unemployment in the tech sector, either, but unionizing and legislating are not the answers. Innovation, entrepreneurship, and low tax overhead will help. We also have to face up to the fact that there are industrious and hard working people out there who will do our job on the cheap. We in the West need to wake up, start thinking more innovatively, and compete with our best tools: our creativity, education, and tremendous freedom to explore new business opportunities.

Re:Message sent, but will it be received?

[Jeremi]

Ah yes, the race to the bottom... in a few years we'll hear about jobs moving from India to Ethiopia, because the Indians are too picky about things like "wanting food feed their children" and "reducing the work week to 80 hours" to be competitive in the global marketplace.

Re:Message sent, but will it be received?

[arivanov]

Well... Slashdot needs an extra moderation item - -1 [misinformed, misguided and never been outside South Carolina].

First - while we have 5 weeks of vacation we do not have statuatory sick leave if a member of the family is sick. US has up to 2 of those. So if you have two kids under 14 in the family and both parents are working the numbers roughly add up to the same - 3 weeks of effective holiday.

Second - You clearly have no idea of Bureaucracy. If the problem was bureaucracy nobody would have invested in China. Or India for that matter.

Third - Unions. India has them too. Expect to hear more about them.

Culture - While I understand your bile I have to disagree with it. The highest productivity in Europe in the high tech industry is in the country that works least per day. Spain. The lowest productivity is in the country that works most - UK. This is actually reasonable if you think about it. If you work with your brain it does not help working yourself out flat and burning it.

The reasons why idiot PHBs are moving high tech jobs to India is that they like the idea of making people work flat and they count work by the hour, not by the product produced. In 2-3 years once the dust has settled it will become evident that there are no savings and whatever is gained in lower labour costs is lost in productivity (see the Culture note above).

There is also the reason why smart PHBs are moving high tech jobs to India. There are fewer and fewer native high tech graduates in Europe (both East and West) and the US. That is not the case in India and China. So if a company wants to establish a long term operation it is reasonable for it to move there.

Re:Message sent, but will it be received?

[smittyoneeach]

I just want to know what precludes these disenfranchised workers from forming a company and competing with IBM and their new Indian hires.
A new company formed of the actual talent, with all of the PHBs and their golden parachute collections amputated, ought to compete effectively, or am I missing something?

Its the Chinese Wall Manuever

[0kComputer]

Individual companies can't get away with shipping jobs to India due to the offshoring stigma, so what do they do? They hire consulting firms like IBM who basically do the dirty work for them. Problem solved; good cheap labor at a fraction of the cost without it being a PR nightmare because technically the company isn't offshoring. I've seen this happening more and more. Kind of scary.

Re:There was a story when I worked at Microsoft

[Reality Master 101]

The fact is that IT companies have made millions and billions off of the work of their employees. IT employees have only been handed a small fraction of that money.

Um -- you're not paid based on how much money you generate for a company, you're paid based on how replaceable your job is. Guess what? If the janitor stops taking out the trash, eventually the company stops making money. Are the janitors worth a billion dollars a year? No -- because they're paid based on the value of the work they do. They are easily replaceable.

Same for engineers. You are paid based on how unique your work is. If your work can be easily replaced by another engineer, you're low paid. If it is sufficiently unique, then you are higher paid. Supply and demand, man. Supply and demand.

Want to be the one who collects the money at the top? Easy. Start your own company and create some jobs of your own.

Unions can create temporary bubbles where you get higher pay than you deserve, but ultimately it hurts you. Would you rather have a 20% more pay temporarily, but then no job at all when it's outsourced, or would you rather have more stability, just at a market wage?

Europe is choosing "no job" every day.

I think it's been received loud and clear

[Groovus]

And the response of these workers and others in Europe is that they don't want to be chattel/wage slaves. Shocking isn't it? It seems like people in Europe can somehow envision a world where there is such a thing as enough profit, and that at the end of the day corporations exist for the betterment of all of society - not vice versa.

One of my old bosses had a great expression - "Trees don't grow to the sky." It was in relation to commodity trading, but it's applicable in many areas of life. Growth can not be infinite - it's simply not sustainable. At some point you need to be satisfied that you're running a profitable business, creating valued products.

Causing unemployment in Europe and the U.S. to save a couple sheckles on the front end will ultimately result in less wealth and less growth in the long run. You need someone to buy your products, and as others have already pointed out, the unemployed and minimum wage workers of the world aren't going to be able to do so. All the arm chair "free marketers" need to dig a little deeper with their analysis than parroting "corporations are in business to make money" and thereby whatever they do in that line makes sense - that may be a primary goal, but it certainly doesn't valildate or justify every decision corporations make.

Greed is good only works up to a point - after which you start eating your own young.

Re:There was a story when I worked at Microsoft

[Anonymous Coward]

> Want to be the one who collects the money at the top? Easy. Start your own company and create some jobs of your own.

There, in a nutshell, is the problem. The system we have now is designed to funnel the profits into the hands of a few people, and after multiple decades of this, you end up with a situation like we have now - professionals who used to be able to raise a family in a nice home on a single income now barely scrape by with two incomes.

This is a cycle of free-market capitalism, it's inherent in the structure of business. As the money gets concentrated at the top, there's less to go around. That's why you see small businesses closing left and right, while Starbucks and Wal-Mart open yet another store in your area. Even if you have an employee-owned company with profit sharing, it will eventually get swallowed up or plowed over by a larger company whose owners screwed people over so they could gain obscene wealth.

What's the answer? I don't know. Some say eat the rich. I say form cooperatives. The solution is probably somewhere in between.