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Coverage on H1-B and L1 Visa and Outsourcing Issues

• iSeries Network: Are Unions the Answer to IT Workers’ Outsourcing Worries? Excerpt: In March, Harry Newman and Tom Lynch, IBM’s outgoing and incoming directors of employee relations, respectively, held a live Internet broadcast with Big Blue’s 2,000 human resource managers around the globe. At the time, they probably didn’t foresee that their electronic pow-wow would become the subject of a July 22 New York Times story that would quickly spread across the business and IT press and community. But spread it has — like wildfire. The hour-long discussion was recorded and stored in digital form on an internal IBM Web site. An employee with access to the recording, who was reportedly upset about the contents of the discussion, “outed” the company by passing a copy to the Washington Alliance of Technology Workers (WashTech), which, in turn, passed a copy to the New York Times. The cause of the furor is IBM’s clearly stated intention to move thousands of white-collar jobs from the U.S. to other countries, most notably, India. WashTech quotes Lynch saying during the meeting, “We don’t want to sit back and say ‘Don’t do it.’ because it’s going to be a problem. Our competitors are doing it, and we have to do it.” If link is broken, view Adobe Acrobat version [PDF--31 KB].



• The Journal News (Westchester, Rockland and Putnam Counties, New York): Flow of jobs overseas has human toll. Excerpt: The first two times that IBM Corp. asked Bonny Berger to train a foreign worker to take over her job, she didn't mind because another position was waiting. "I wasn't worried for my job, so for me it was fine. Maybe there were people who were less naive than I was," said Berger, a wife and mother from East Brunswick, N.J. Berger felt secure largely because of her track record at AT&T, where she was employed as a programmer for 21 years before IBM took over the telecom giant's computer operations in 1999. Berger said colleagues were happy to join IBM because Big Blue had a reputation for hiring. "We found out later that they're hiring in India and other countries," she said. In January 2002, Berger learned for the third time that her job was being sent "offshore." This time there wasn't another position waiting.



• Gartner: 1 in 10 Tech Jobs May Move Offshore. Excerpt: Offshore outsourcing" is the euphemism the computer industry uses to describe the transformation of software development, computer services and customer call-center work. As a global economic downturn has bit hard over the past two years, U.S. companies have embraced as never before a decade-old trend to hire educated workers abroad who can be employed for one-tenth the cost of U.S.-based professionals.



• ABC News: White-Collar Exodus. High-Paying Jobs Are Moving Overseas, U.S. Workers Replaced by Foreigners. Excerpt: Michael Emmons thought he knew how to keep a job as a software programmer. "You have to continue to keep yourself up to speed," he said. "If you don't, you'll get washed out." Up to speed or not, Emmons wound up being "washed out" anyway. Last summer, he moved his family from California to Florida for the Siemens Co., makers of electronics and equipment for industries. Not long after, Emmons and 19 other programmers were replaced by cheaper foreign workers. Adding insult to injury, Emmons and the others had to train their replacements. "It was the most demoralizing thing I've ever been through," he told ABCNEWS. "After spending all this time in this industry and working to keep my skills up-to-date, I had to now teach foreign workers how to do my job so they could lay me off."



• Electronic News: Offshore Outsourcing Saves Dollars, But Costs Talent, Gartner Warns. Excerpt: "To many CIOs and business executives, the decision to outsource activities offshore is fiscally sound -- the cost, quality, value and process advantages are well-proven," said Diane Morello, VP and research director at Gartner, in a statement. "At a time when IS organizations are struggling with poor credibility and IT is being scrutinized, offshore outsourcing is becoming a tool for improving service delivery and a source of highly qualified talent in greater numbers." However, Gartner analysts said that CIOs and other business executives can't ignore the impact of offshore outsourcing on their business strategies, their organization or their employees. Three areas of concern that Gartner noted are loss of future talent, loss of intellectual assets and loss of organizational performance.



• Time Magazine: Where the Good Jobs Are Going. Forget sweatshops. U.S. companies are now shifting high-wage work overseas, especially to India. Excerpt: Little by little, Sab Maglione could feel his job slipping away. He worked for a large insurance firm in northern New Jersey, developing the software it uses to keep track of its agents. But in mid-2001, his employer introduced him to Tata Consultancy Services, India's largest software company. About 120 Tata employees were brought in to help on a platform-conversion project. Maglione, 44, trained and managed a five-person Tata team. When one of them was named manager, he started to worry. By the end of last year, 70% of the project had been shifted to India and nearly all 20 U.S. workers, including Maglione, were laid off.



• Linda Guyer comments on IBM's outsourcing plans. Full excerpt: I can tell you what we've been told by a very good source. I cannot name the source nor prove it is true, so with that disclaimer: IGS plans to move 30,000 US jobs, or approx. 25% of its employees, overseas by end of 2004. The plan is to ultimately move EVERY job that supports an internal account. I also hear they are behind schedule at the moment.



• Daily Freeman (Kingston, NY): IBM 'outsourcing' indicative of trend. Excerpt: "In the Northeast, it's been something we've been experiencing for years ... with the moving of manufacturing first to south then to South America and the Far East," said Chester Straub, president of Ulster County Development Corp. Straub also said advances in telecommunications and greater utilization of the Internet are making white-collar jobs more portable. "In the case of IBM, it's part of their continuing effort to maximize profits while maintaining market position," he said. Union organizer Lee Conrad, with Endicott-based Alliance@IBM/Communications Workers of America Local 1701, a union not recognized by IBM, put it more bluntly. "I think it has more to do with greed, plan and simple," Conrad said. "Companies like IBM are going where the lowest costs and wages are."



• Boston Globe: Double standard on globalization. Excerpt: If you get into a conversation with a billing representative of your credit card provider or phone company, you may notice a faint Indian accent. That's because the services industry is shifting more back room operations to India, where labor costs are a fraction of those in the United States. IBM, likewise, will soon move several thousand computer programming jobs to India, where programmers get far lower salaries. This decision has angered IBM employees and is contributing to a rare unionization drive at the high-tech giant, a company that once prided itself on never laying anyone off. ... In these cases, industry defends the moves as cost-effective and economically logical. If productive English-speaking workers in India can perform the jobs, why not move the work there and pass the savings along to shareholders and consumers? Most economists, enthusiasts of free commerce, agree that these shifts help both India and the United States.

  But hold on a moment. India figures in another controversy. Indian pharmaceutical labs make prescription drugs at a fraction of the cost that American drug makers charge consumers. In this case, however, it is illegal for American consumers to benefit. The politically powerful pharmaceutical industry contends that imports of cheaper foreign drugs violate patent rights and safety regulations. The industry is also battling legislation that would allow consumers to import cheaper drugs from Canada, which legally manufactures or purchases the drugs under license from the US pharmaceutical companies and conforms to US safety standards or better. If you notice a double standard here, you're right.

• The White House: President Bush Discusses Top Priorities for the U.S. Press Conference of the President, including a question concerning overseas outsourcing. Excerpt: Question. Thank you, Mr. President. Staying with that theme, although there are some signs of improvement in the economy, there are sectors in the work force who feel like they're being left behind. They're concerned about jobs going overseas, that technology is taking over jobs. And these people are finding difficulty finding work. And although you're recommitted yourself to your tax cut policy, do you have any ideas or any plans within the administration of what you might do for these people who feel like there are fundamental changes happening in the work force and in the economy? THE PRESIDENT: Sure. Listen, I fully understand what you're saying. In other words, as technology races through the economy, a lot of times worker skills don't keep up with technological change. And that's a significant issue that we've got to address in the country. I think my idea of reemployment accounts makes a lot of sense. In essence, it says that you get $3,000 from the federal government to help you with training, day care, transportation, perhaps moving to another city. And if, within a period of time, you're able to find a job, you keep the balance as a reemployment bonus. I know the community colleges provide a very important role in worker training, worker retraining. I look forward to working with our community colleges through the Department of Education, coordinate closely with states, particularly in those states in which technology is changing the nature of the job force. I've always found the community college -- and this is from my days as the governor of Texas -- found the community college to be a very appropriate place for job training programs because they're more adaptable, their curriculums are easier to change, they're accessible. Community colleges are all over the place. And -- but you're right. I mean, I think we need to make sure that people get the training necessary to keep up with the nature of the jobs, as jobs change.



• Institute of Electrical and Electronics Engineers (IEEE): President Blames Unemployment on Lack of Skills! Engineers Must Correct this Mistake. Excerpt: It is essential that engineers tell the President that the unprecedented levels of unemployment in the high-tech sector are not the fault of American workers. But if we are to be heard, we need as many engineers as possible to e-mail the President and express their concern. These e-mails MUST be received in the next few days, no later than Friday, August 1st, to be effective. When you write the President, tell him that unemployment in the high-tech sector has very little to do with the competency of American workers, and a great deal to do with the low cost of using foreign workers. American electrical engineers are as good as their counterparts in other countries. But it is difficult to compete with engineers from Asia and Eastern Europe who are paid 20% to 50% less than the prevailing wage in the US.

This week on the Alliance@IBM Site:

• Attention Boulder area employees: A meeting with the subject "Offshoring your Job!" will be held Thursday, August 7, at 5:30 pm. at the Shepard on the Hill Church, 71st and Lookout Rd in Gun barrel (near the IBM Boulder location, east of King Soopers). We will be meeting in the fellowship hall.



• A new page with information about the Cooper vs. IBM lawsuit has been added. Content on this page includes:
  • Summary of Judge Murphy's ruling
  • Full text of Judge Murphy's ruling
  • Who is included in the class action?
  • Excellent article in the NY Times
  • IBM's Press Release in response to the ruling
  • Letter from J.R. MacDonald, Sr. VP of Human Resources, to employees
  • Consultant Watson Wyatt, not surprisingly, takes IBM's side.


• Offshore Lore - Myths and facts of white-collar out-sourcing.