Good thing the economy is rebounding, because it will have to absorb another 5,000 good jobs exported to India and China. The Wall Street Journal reports (subscription only):
In one of the largest moves to "offshore" highly paid U.S. software jobs, International Business Machines Corp. has told its managers to plan on moving the work of as many as 4,730 programmers to India, China and elsewhere.
The unannounced plan, outlined in company documents viewed by The Wall Street Journal, would replace thousands of workers at IBM facilities in Southbury, Conn., Poughkeepsie, N.Y., Raleigh, N.C., Dallas, Boulder, Colo., and elsewhere in the U.S. Already, the managers have been told, IBM has hired 500 engineers in India to take on some of the work that will be moved.
And IBM isn't the only one.
The plan shows how even as the information-technology industry starts to recover from a two-year slump, relentless pressure to cut costs is pushing more operations offshore. The trend looms as one of the most serious long-term threats to U.S. employment and labor. Countries with lower-paid workers are no longer siphoning just unskilled or blue-collar jobs from U.S. workers; they now are scooping up skilled work from U.S. companies on a large scale.
By the end of the coming year, one out of every 10 jobs within U.S.-based computer-services companies will move to emerging markets, as will one of every 20 technology jobs in other corporations, according to tech-industry researcher Gartner Inc. Another research firm, International Data Corp., recently estimated that by 2007, 23% of all information-technology services jobs will be offshore, up from 5% this year. Recently, computer-services titan Accenture said that based on current trends it expects to more than double its current work force in India during the coming 12 months to 10,000 from 4,300.
Unlike low-wage manufacturing, the U.S. computer-services jobs to be moved overseas by IBM typically pay $75,000 to $100,000 or more a year, according to one person familiar with the operations. In contrast, hiring a software engineer with a bachelors or even a masters degree from a top technical university in India may cost $10,000 to $20,000 annually, analysts say.
Bush will desperately point to its one good month of GDP growth and proclaim the economy fixed. But the jobs picture will have more relevance in 2004. And these outsourced jobs ain't coming back, no matter how strong the economy roars ahead.
