The Wall Street Journal reported this week that Big Blue has told its managers to plan on shifting the work of thousands of programmers to foreign countries. The story referred to company documents and said the plan involves people in IBM's Application Management Services group.
IBM, which employed a total of nearly 316,000 workers at the end of 2002, said in a statement that it does not comment on "internal presentations or projections." But according to the statement, "the vast majority of the growth in application services that will occur in markets like India, China and Latin America will result from winning new contracts." By "markets," IBM is referring to where the services will be provided from, not the location of the customer, said company spokesman James Sciales.
IBM also said that "on a percentage basis, our forecast is for hiring across the Americas to outpace the hiring in the rest of the world." Sciales declined to give a specific number for what US hiring will be in 2003.
IBM's hiring plans are more fuel for a controversy over the practice of sending information technology work to lower-cost regions of the globe. Forrester Research has estimated that the number of computer jobs moving overseas will grow from 27,171 in 2000 to a cumulative total of 472,632 by 2015. So-called offshoring of IT work has come under criticism in light of job cuts in the US tech sector.
On Tuesday, a union group trying to organise workers at Big Blue said IBM's alleged plans reported by the Journal reflect the tip of the iceberg.
"We are hearing that the number of global services jobs that will be offshored is about 40,000 by 2005," said Lee Conrad, national coordinator of the Alliance@IBM, which is a branch of the Communications Workers of America. IBM's global services wing handles tasks such application management, business consulting and training.
IBM's Sciales declined to comment on the Alliance's projection. But he said Big Blue has long been international in scope. More than half of the company's employees are located outside the United States, he said.
Talkback
I have read numerous newspaper articles in Indian newspapers complaining about the growing backlash against overseas outsourcing of U.S. IT jobs. There is always a cry that India is part of globalization and free trade. Job loss is blamed on the alleged lack of competitiveness of the American worker. Americans are told to be competitive or lose jobs to the free market. If only India would practice what it preaches. India has one of the most restricitve business climates for foreign investment in the world. Imports face heavy tariffs. Foreign businessmen are not permitted to own businesses with out Indian partners. In the U.S. Indian citizens who are legal residents are free to owm businesses without U.S. citizen partners. In the U.S. Indian firms are free to bid on government contracts and service work. In India only Indian firms can participate in government contract work. The list could go on almost ad infinitum. India need to open its markets and allow competition. Until that happens the U.S. should restrict Indian IT firms and other countries with closed markets from government contracting. The U.S. government should penalize U.S. firms that out source jobs to countries that restrict U.S. business from entering their markets.