Washtech protests offshore tech hiring

Date: Monday, January 27, 2003 9:18 AM

H-1B and JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

For more information go to the Washtech website:
http://www.washtech.org/

http://www.bayarea.com/mld/mercurynews/business/5029306.htm

Posted on Sat, Jan. 25, 2003

Labor group protests offshore tech hiring

IT CLAIMS COST CUTTING HURTS U.S. WORKERS
By Kristi Heim
Mercury News Seattle Bureau

SEATTLE - A Washington labor group started a nationwide Internet
campaign Friday calling for a government investigation into the
practice of U.S. technology companies sending jobs offshore.

To stem what it calls the ``Great Tech Job Exodus,'' the Washington
Alliance of Technology Workers has set up a Web site to help tech
workers forward e-mails to their elected officials, urging them to
examine the legality and long-term effects of the growing trend. The
group also began passing out leaflets at Microsoft's Redmond, Wash.,
campus and plans to lobby local politicians.

``We need to look much more closely at the ramifications of this
disturbing trend -- on U.S. workers, the communities in which they live
and the future economic and technological security of this country,''
WashTech said in a message on its Web site.

WashTech, an affiliate of the Communications Workers of America, also
has supported a class-action lawsuit by contract workers at Microsoft
-- so-called ``permatemps'' -- and a drive to unionize customer-service
workers at Amazon.com.

The group Friday posted an internal Microsoft document that outlined
its growing reliance on contractors, mostly software engineers, in
India to cut labor costs and run an 18-hour production cycle.

In a presentation in July, Microsoft Senior Vice President Brian
Valentine said the company could get ``quality work at 50 to 60 percent
of the cost,'' adding, ``that's two heads for the price of one.''
Valentine also urged managers to ``pick a project and outsource
today.''

Microsoft acknowledged that Valentine made the presentation. But
company spokeswoman Stacy Drake said, ``We are not replacing U.S. jobs
or laying off workers.''

Microsoft is adding 4,000 new positions in the United States this year
and 1,000 positions overseas, she said.

``Microsoft is a global company with customers and partners throughout
the world,'' she said. ``However, our philosophy has and continues to
be that our software development model is most effective when managed
by highly integrated centralized teams in Redmond.''

Microsoft maintains a development center in Hyderabad, India, and a
customer-service center in Shanghai.

``Outsourcing is not just for non-critical work'' Valentine wrote.
``Redmond is not the center of the universe.''

Microsoft is just the latest company to embrace the trend. Silicon
Valley companies have been increasingly shifting work -- ranging from
software programming to customer service to chip design -- overseas
recently.

Oracle of Redwood Shores is opening a new software development center
in Beijing and adding 2,000 engineers for applications development work
in India. Last year, the company cut 200 U.S. software applications
development jobs. Oracle said the overseas development centers were
helping the company control its costs.

Santa Clara chip giant Intel is increasing its staff in India, saying
it only makes sense to invest in the markets where its customers are.
Intel has also expanded its presence in Russia and now employs about
400 people there.

Sun Microsystems, a leading maker of Unix-based servers, is outsourcing
some of its product development to Indian companies, although the
company says it's a small portion.

``Because this is an industrywide trend, we're trying to engage tech
workers on a nationwide level,'' said Marcus Courtney, WashTech
president.

Courtney cited industry reports that U.S. companies will move about 3.3
million white-collar service jobs and $136 billion in wages overseas in
the next 15 years. ``IT giants such as Microsoft, HP and IBM are
leading the way,'' he said.

Bruce Frager of Los Gatos thinks such grass-roots campaigns are
necessary on a national level. Frager said his son, a software engineer
in the valley, lost his job in October when his employer told him he
was being replaced by 10 engineers in Russia for half the cost.

``Companies have a right to go wherever they want,'' said the elder
Frager. ``They say we can't find enough qualified U.S. engineers, but
there are enough. It's because of the cost differential that it's
cheaper for these companies to hire them overseas.''

``The long-term net result will be a reverse brain drain, and the U.S.
is going to suffer,'' he said.

Contact Kristi Heim at kheim@sjmercury.com or (206) 632-8160.

Help to Keep ZaZona.com Online

Donate to the Cause at
http://www.zazona.com/Donations.htm
To Subscribe or Unsubcribe send an email to

Back to archives