- (Reuters) - US corporates are shifting more jobs abroad
but attempting to keep the practice quiet, according to analysts
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- US corporations are picking up the pace in shifting well-paid
technology jobs to India, China and other low-cost centres, but they are
keeping quiet for fear of a backlash, industry professionals said.
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- Morgan Stanley estimates the number of US jobs outsourced
to India will double to about 150,000 in the next three years. Analysts
predict as many as 2 million US white-collar jobs such as those filled
by programmers, software engineers and applications designers will shift
to low-cost centres by 2014.
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- But the biggest companies looking to "offshoring"
to cut costs, such as Microsoft, IBM and AT&T Wireless, are reluctant
to attract attention for political reasons, observers said this week.
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- "The problem is that companies aren't sure if it's
politically correct to talk about it," said Jack Trout, a principal
of Trout & Partners, a marketing and strategy firm. "Nobody has
come up with a way to spin it in a positive way."
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- This causes a problem for publicly traded companies,
which would ordinarily brag about cost savings to investors. Instead, they
send vague signals that they are opening up operations in India and China,
but often decline to elaborate.
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- Moreover, on the threshold of a US presidential election
year, job losses are a hot-button issue. A company that highlighted a major
job transfer could wind up in the campaign debate.
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- Multinationals find that when they trumpet expansion
overseas, they cause problems at home. When Accenture executives in India
this month announced plans to double their staff to 10,000 next year, they
triggered a flood of calls to the company's US offices about US job losses.
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- Offshoring companies "are paying Chinese wages and
selling at US prices," said Alan Tonelson, of the US Business and
Industrial Council, a trade group for small business. "They're not
creating better living standards for America."
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- The US sales director for one of India's top computer
services providers said his company has won business from customers such
as Walt Disney, Time Warner's CNN and the Fox division of News Corporation
-- none of which wants public disclosure.
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- In India, some technology companies have recently adopted
lower profiles. Microsoft has been removing its name from minibuses used
to ferry engineers on overnight shifts. Major Indian beneficiaries of US
business such as Infosys Technologies, Wipro and Satyam Computer Services
have stopped identifying new customers.
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- While there have been reports that IBM intends to ship
4,700 high-end jobs to India and China next year, they mark a rare instance
when figures "have been reported in black and white," said Linda
Guyer, president of Alliance+IBM, a union that has tried to organise IBM
employees.
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- Those numbers were not released by IBM, but rather disclosed
by The Wall Street Journal, which had obtained an internal memo. The company
has declined to comment.
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- Guyer believes as many as 40,000 of IBM's 160,000 US
jobs will be transferred overseas by 2005, a figure that she says was gathered
from phone calls by IBM employees.
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- Previously, IBM has pointed to a report by the McKinsey
Global Institute that concludes the US economy ultimately will benefit.
The report was commissioned by Nasscom, a group made up of Indian tech
companies as well as IBM's Indian services unit -- showing an effort by
those invested in offshoring to sway public opinion.
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- Recently, AT&T Wireless told the US Securities and
Exchange Commission that it would lay off 1,900 employees this year. Communications
Workers of America members obtained an internal memo prepared by Tata Consultancy
Services of India that discussed how it would assume those US jobs.
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- Subsequently, AT&T Wireless officials acknowledged
it was exploring the job shifts but didn't offer details.
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- While some companies, such as Electronic Data Systems,
CAP Gemini Ernst & Young and Sapient, acknowledge they shift jobs abroad
to exploit cost advantages and around-the-clock work, IBM asserts that
it is not moving jobs but creating new ones.
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- "It's a business strategy, period. You cut costs.
You revamp. You look at what your mission statement says and try to turn
a profit," said Sylvia Thomas, who was laid off by chipmaker Agere
Systems after declining offers to relocate to headquarters in Allentown,
Pennsylvania -- or to Singapore.
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