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IBM Shifts 14,000 Jobs to India 1077

Posted by Zonk
from the wave-goodbye-to-blue dept.
Omar Khan writes "The New York Times reports, 'Even as it lays off up to 13,000 workers in Europe and the U.S., IBM plans to increase its payroll in India this year by more than 14,000 workers.' Slashdot previously covered the black-and-blue strike, in which the union wondered, 'if other cost cutting mechanisms could achieve the same effect without cutting so may jobs.'"
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IBM Shifts 14,000 Jobs to India

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  • by coupland (160334) * <dchase@@@hotmail...com> on Friday June 24, 2005 @12:34PM (#12901664) Journal

    I'm sorry but IBM is speaking to European workers very clearly here, however I'm not sure they're listening. The constant strikes, the 5+ weeks of vacation, the voting down of the EU constitution to avoid US-style capitalism. These jobs are vanishing into India because of the cost and headache of dealing with European unions, workers, culture, and bureaucracy. Frankly it's a pain in the ass, and for a market that often has little growth potential. Asia isn't just where the cheap labour is, it's also where the growth is, and the governments eager to work with you, and the best bang-for-the-buck for companies seeking to invest. Until European workers learn to compete aggressively we'll keep on hearing stories like this of companies that just shrug and say "fine, have it your way." Apologies, but something's gotta give.

    • by yog (19073) on Friday June 24, 2005 @12:44PM (#12901798) Homepage Journal
      And US workers. From the article:
      "I.B.M. is really pushing this offshore outsourcing to relentlessly cut costs and to export skilled jobs abroad," said Marcus Courtney, president of the Washington Alliance of Technology Workers, or WashTech, a group that seeks to unionize such workers. "The winners are the richest corporations in the world, and American workers lose."
      They just don't get it. The winners are the consumer who gets to pay lower prices for the products and services. The other winners are the stockholders of the corporation who get higher dividends and portfolio value. Now, we all are consumers of IBM and similar high tech goods and services--every time we use an ATM, an insurance company, a bank, a personal computer--we are benefiting from offshoring of high cost labor and parts.

      I think this group that seeks to unionize tech workers needs to rethink its strategy a bit. Raising the cost of labor will not provide for secure employment, quite the opposite in fact.

      I don't like to see rising unemployment in the tech sector, either, but unionizing and legislating are not the answers. Innovation, entrepreneurship, and low tax overhead will help. We also have to face up to the fact that there are industrious and hard working people out there who will do our job on the cheap. We in the West need to wake up, start thinking more innovatively, and compete with our best tools: our creativity, education, and tremendous freedom to explore new business opportunities.

      • by DogDude (805747) on Friday June 24, 2005 @12:49PM (#12901863) Homepage
        I don't like to see rising unemployment in the tech sector, either, but unionizing and legislating are not the answers. Innovation, entrepreneurship, and low tax overhead will help. We also have to face up to the fact that there are industrious and hard working people out there who will do our job on the cheap. We in the West need to wake up, start thinking more innovatively, and compete with our best tools: our creativity, education, and tremendous freedom to explore new business opportunities.

        All true, but it's waaaaay too late to fix this. If anything, IT industry workers as a whole needed to realize this 10 years ago. Today, IT people still think of themselves as deserving of an inordinately large paycheck. And what's interesting is that IT people that I know and that I have talked to all seem to keep this mentality even while they're unemployed. I got my wake up call years ago, and left the IT industry for good, because I know that I'm not willing to sit in a fucking cubicle and commute with the lemmings every day for less than $xx an hour.
        • Hilarity.

          I see 7 hits for "perl" under $30k [monster.com]. 76 under $50k [monster.com].

          Did I blink or something and companies suddenly quit using Perl? I get 9 hits for J2EE under $30k. 45 under $50k.

          Obviously the future lies with the latest and greatest languages. C# has a whopping 85 entries under $50k. 5 under $30k.

          So tell me, what do I need to search for to pull up the 14,000 jobs that IBM has available? Surely I can move in with my parents and give up saving for the future and make myself competitive for one of these po
      • by ScentCone (795499) on Friday June 24, 2005 @12:58PM (#12901992)
        I don't like to see rising unemployment in the tech sector, either, but unionizing and legislating are not the answers. Innovation, entrepreneurship, and low tax overhead will help. We also have to face up to the fact that there are industrious and hard working people out there who will do our job on the cheap. We in the West need to wake up, start thinking more innovatively, and compete with our best tools: our creativity, education, and tremendous freedom to explore new business opportunities.

        Listen, buddy, you're not going to get anywhere making sober, rational, actually true statements like that here on slashdot. If you can't make your point by bashing large companies and demonizing people in India, then you're just a Corporate Stooge(tm). Like me!

        Like me, in the sense that I've still got a tech job in the US because I'm making sure that I do work for people that need something beyond simple certifications. The key to having a tech career in the US is in demonstrating how you can connect your comfort with the culture, language, and business habits of the country directly with the IT project at hand. A SQL query, a backup drive, and NAT settings don't really depend too much on cultural history or a smooth use of American English. But the execution of a project that faces North American business users and consumers is only going to shine if the people working on it don't have to have certain idioms translated, or certain Americanisms explained in detail before a dialog box can be well written or a menu hot key wisely selected.

        More importantly, those e-mail threads and meetings that shape the budgets around projects or choose a technology strategy for some problem can be maddeningly derailed by the wrong-continent-ness of off-shored team members, no matter how inately talented or well trained. In short: get tech savvy, and then get in the business of helping tech-dependent organizations use tech resources, even if some of them are overseas. Being the resource is risky, but being an astute student of US culture and knowing which resources make the most sense to use - that's a less vulnerable line of work (and it pays better).
        • by smitty_one_each (243267) * on Friday June 24, 2005 @01:10PM (#12902112) Homepage Journal
          I just want to know what precludes these disenfranchised workers from forming a company and competing with IBM and their new Indian hires.
          A new company formed of the actual talent, with all of the PHBs and their golden parachute collections amputated, ought to compete effectively, or am I missing something?
          • by ScentCone (795499) on Friday June 24, 2005 @02:09PM (#12902861)
            I just want to know what precludes these disenfranchised workers from forming a company and competing with IBM and their new Indian hires.

            Well, never mind the competitive issues for the moment. The real shock to "workers" who try to do that is that all of the sudden they're facing the same issues their bosses did. The fact that they need a management layer, for example. And the people who tend to be really talented in that area can also be wooed away to a better deal elsewhere... which means that the workers are going to have to sweeten the pot to keep around the sort of people that know how to swing investment deals, secure better insurance rates, negotiate mutli-million dollar office deals, talk with the lawyers, and so on.

            You can purge the PHBs, but the space they occupy doesn't really go away. Companies populated entirely by engineers, no matter how talented, fail early and fail often. The more so when there doesn't seem to be enough money around to pay for their services (at leats, compared to people in India with the same certifications who will work for a quarter of the price and be thrilled to do so).
      • by demigod (20497) on Friday June 24, 2005 @01:21PM (#12902268)
        The winners are the consumer who gets to pay lower prices for the products and services.

        I guess I missed IBM's announcement they were lowering prices. Got a URL?

        I use to work for fortune 500 company that outsourced a bunch of thier IT works (not me). They never lowered prices, but the CEO did get a hell of a raise that year.

      • Yes, the raft of people who are in personal financial trouble from the lack of steady work is vastly impressing. When the electricity gets shut off because you just can't come up with the 4 months in arrears, I'm sure that $10 CD player for sale in the nearby Wal*Mart will be a big fucking comfort to you.

        The mantra of lowered prices is getting waaaaay out of control. People who are not only tossed out of steady work, but are also tossed into big indebtedness, are only going to consume your stupid cheap
    • by WindBourne (631190) on Friday June 24, 2005 @12:49PM (#12901860) Journal
      To the USA and EU. The jobs disappearing from EU were preceeded by US layoffs some time ago. And it is not just IBM, but I think that many here know that already.
    • by bstarrfield (761726) on Friday June 24, 2005 @12:52PM (#12901907)

      So competition means having European workers work at Indian wages, despite IBM being highly profitable?

      So you want governments and corporations to work together to ensure that the highest goal is ensuring that corporations are profitable?

      Do you truly understand what your saying? Workers have fought for literally centuries to be treated with some degree of respect. Corporations are now making record profits, and still seem to find it necessary to replace their workers with cheaper labor? What the hell is it for? What exactly is the point of all this - we'll all be back to 6:00 AM to 9:00 PM hours, with no vacation, at half the wage so that the elite have growth of their profits.

      Capitalism works because people assume that they have a chance of advancing, that the lives of their children will be better. If globalization simply means a gross reduction of wages and transfer of assets to the wealthy, capitalism will lose popular support. How many former IBM employees are going to be praising outsourcing?

      • Capitalism was around long before globalization. I'd tend to think that countries would prefer isolationism first before moving away from capitalism.
      • by tsotha (720379) on Friday June 24, 2005 @02:43PM (#12903238)
        Corporations are now making record profits, and still seem to find it necessary to replace their workers with cheaper labor?

        Is that really true? Record profits?

        IBM may be profitable, but IBM is a multinational company that isn't based in Europe. Its officers aren't based in Europe. Why would you expect IBM would have more loyalty to European workers than Indian? And why would Europeans be entitled to those jobs when out-of-work Indians are willing to do the same work for less money?

        What exactly is the point of all this - we'll all be back to 6:00 AM to 9:00 PM hours, with no vacation, at half the wage so that the elite have growth of their profits.

        I think GM would be a great case study here. The workers managed to wrest lots of concessions from the company, but in doing so set it up for a huge fall when cheaper, higher quality cars showed up in North America. You and I can pass laws so we don't have to compete with Indian and Chinese labor, but IBM will always be competing with other multinationals. They have to contain costs, or they won't be able to compete. This year it might show up as profit, but next year it's the margin they have to lower prices to fend off NEC or Samsung.

        Capitalism works because people assume that they have a chance of advancing, that the lives of their children will be better. If globalization simply means a gross reduction of wages and transfer of assets to the wealthy, capitalism will lose popular support. How many former IBM employees are going to be praising outsourcing?

        Corporations work because they produce goods and services people are willing to buy. It really doesn't have much to do with how happy the employees are. And it may be that capitalism loses popular support in certain places, but so what? Countries that can't or won't compete will see stagnant growth and high unemployment while the capitalist countries will grow. Did we learn nothing from the travesty that was Communism?

        There isn't any reason Europeans can't compete with Indians, despite the wage differentials. European companies have a lot of advantages Indian companies don't have, like proximity to wealthy markets, a better educated workforce (not everybody in India went to IIT), and better infrastructure.

        I'd be willing to bet the Europeans could keep their generous vacations and wages, but it's so hard to fire people in Europe it doesn't make sense to hire people. I'll bet it's costing IBM a fortune to lay off 11,000 people. Companies expand and contract with normal business cycles, and forcing them to keep all their employees during contractions means they'll be really reluctant to hire people when times are good. Not only does that reduce the number of available jobs, but it puts companies at a competitive disadvantage.

    • by Jeremi (14640) on Friday June 24, 2005 @12:53PM (#12901925) Homepage
      Ah yes, the race to the bottom... in a few years we'll hear about jobs moving from India to Ethiopia, because the Indians are too picky about things like "wanting food feed their children" and "reducing the work week to 80 hours" to be competitive in the global marketplace.
      • by That's Unpossible! (722232) * on Friday June 24, 2005 @03:42PM (#12903921)
        Ah yes, the race to the bottom... in a few years we'll hear about jobs moving from India to Ethiopia, because the Indians are too picky about things like "wanting food feed their children" and "reducing the work week to 80 hours" to be competitive in the global marketplace.

        Bullshit. In this dystopia you've described, who do you think these corporations are selling their products to? After all, everyone is out of work except for the Ethiopians, who don't make enough to buy the products.

        Hmmm, perhaps your argument is not logical?
    • by arivanov (12034) on Friday June 24, 2005 @01:02PM (#12902044) Homepage
      Well... Slashdot needs an extra moderation item - -1 [misinformed, misguided and never been outside South Carolina].

      First - while we have 5 weeks of vacation we do not have statuatory sick leave if a member of the family is sick. US has up to 2 of those. So if you have two kids under 14 in the family and both parents are working the numbers roughly add up to the same - 3 weeks of effective holiday.

      Second - You clearly have no idea of Bureaucracy. If the problem was bureaucracy nobody would have invested in China. Or India for that matter.

      Third - Unions. India has them too. Expect to hear more about them.

      Culture - While I understand your bile I have to disagree with it. The highest productivity in Europe in the high tech industry is in the country that works least per day. Spain. The lowest productivity is in the country that works most - UK. This is actually reasonable if you think about it. If you work with your brain it does not help working yourself out flat and burning it.

      The reasons why idiot PHBs are moving high tech jobs to India is that they like the idea of making people work flat and they count work by the hour, not by the product produced. In 2-3 years once the dust has settled it will become evident that there are no savings and whatever is gained in lower labour costs is lost in productivity (see the Culture note above).

      There is also the reason why smart PHBs are moving high tech jobs to India. There are fewer and fewer native high tech graduates in Europe (both East and West) and the US. That is not the case in India and China. So if a company wants to establish a long term operation it is reasonable for it to move there.

      • Well, okay - I've a small startup which is trying to get into the Nordic region. I cannot speak for the whole of Europe, but I can speak for my experience in Scandinavia so far.

        But one thing I've noticed is that Scandinavians in general are averse to working long hours, or go that extra mile to make things happen. Even more importantly, they expect several paid days off and are lacking in a spirit of capitalism that I've noticed in the US.

        For instance, bang in the middle of last week, we were told that it
        • One more thing:

          "I've noticed that there is a general lethargy, or laid-back attitude while doing business in Europe."

          Laid-back attitude is NOT lethargy. I don't live to work, I only work as much as I need to in order to live as comfortably and securely as I need. I don't work to make YOU rich, and I certainly have no loyalty to you (my dear corporatist employer, not you the poster) since you're showing no loyalty to me.

          Laid-back attitude is healthy for human beings, you know? Maybe Europeans get fewer u
        • by richieb (3277) <richieb@gma i l . com> on Friday June 24, 2005 @04:29PM (#12904325) Homepage Journal
          The attitude in Europe that I've noticed in general is the fact that no matter what, they should somehow be given their holidays and they would take their days off, come what may - that's a hard thing to sustain in a corporate, capitalistic setting.

          I worked for a European company during the 90s and I spent a lot of time working in Paris and London. I haven't noticed anything like this. The company was a startup, and a typical day for everyone was from 08h00 until around 19h00. Nobody was slacking or demanding 5 weeks vacation.

          When you find others who are willing to do the same thing cheaper, and willing to be flexible, you would quite obviously go with them. That is the problem.

          You have to be careful what you mean by "the same thing". If it is sitting in the office for more hours, then sure.

          However, productivity of a programmer (or any "idea" worker) cannot be measured by the number of hours spent in the office.

          For example, whose more productive: programmer A, spends a week from morning to night writing 10,000 lines of code; whereas programmer B slacks on Monday, on Tuesdays realizes that the problem can be solved much nicer using code generation; on Wednesday he completes the generator in Python and is done with the 10,000 lines of code right then and there. Maybe "worked" for solid 8 hours.

          Which one would you like to work in your startup?

    • Labour costs in much of Europe (especially central Europe - Czech Republic, Slovakia, etc.) are much lower than in the U.S. The famous strikes you refer to are mainly in France, as it's a legal right. This is all about cutting costs through lower wages, and not much else. In fact, it really sounds like your "reasoned argument" is just a thinly-disguised, biased rant against those "lazy, undisciplined Europeans". Nice stereotype. Have you ever worked over there, interacted with Brits, Czechs, Dutch, etc.? Th
    • by Groovus (537954) on Friday June 24, 2005 @01:22PM (#12902285)
      And the response of these workers and others in Europe is that they don't want to be chattel/wage slaves. Shocking isn't it? It seems like people in Europe can somehow envision a world where there is such a thing as enough profit, and that at the end of the day corporations exist for the betterment of all of society - not vice versa.

      One of my old bosses had a great expression - "Trees don't grow to the sky." It was in relation to commodity trading, but it's applicable in many areas of life. Growth can not be infinite - it's simply not sustainable. At some point you need to be satisfied that you're running a profitable business, creating valued products.

      Causing unemployment in Europe and the U.S. to save a couple sheckles on the front end will ultimately result in less wealth and less growth in the long run. You need someone to buy your products, and as others have already pointed out, the unemployed and minimum wage workers of the world aren't going to be able to do so. All the arm chair "free marketers" need to dig a little deeper with their analysis than parroting "corporations are in business to make money" and thereby whatever they do in that line makes sense - that may be a primary goal, but it certainly doesn't valildate or justify every decision corporations make.

      Greed is good only works up to a point - after which you start eating your own young.
    • by ragnar (3268) on Friday June 24, 2005 @01:43PM (#12902527) Homepage
      When will the capitalists start outsourcing the CEOs job? When that happens I'll believe the free market cheerleaders.
  • oops (Score:3, Funny)

    by swelke (252267) on Friday June 24, 2005 @12:34PM (#12901673) Homepage Journal
    And this happens just when I was starting to think of IBM as the good guys...
  • Union (Score:3, Informative)

    by ch0p (798613) <ch0pstik@gmail.com> on Friday June 24, 2005 @12:35PM (#12901676) Homepage
    Here [allianceibm.org] is the IBM Union website, if anyone is interested.
  • by CyricZ (887944) on Friday June 24, 2005 @12:36PM (#12901686)
    That's just the free market at work. If the price of labor is cheaper there, then that is where labor will be purchased. It's just as simple as that.
    • by nharmon (97591) on Friday June 24, 2005 @12:39PM (#12901735) Homepage
      Except, we're beginning to realize that you do indeed get what you pay for.
      • by CyricZ (887944) on Friday June 24, 2005 @12:44PM (#12901800)
        I see that you're claiming that Indians are unable to produce quality software and hardware designs. Can you please give some tangible examples/proof of this, and the resulting failures? Indeed, what makes an Indian any less of a programmer than an American or a European?
        • by tommck (69750) on Friday June 24, 2005 @01:07PM (#12902091) Homepage
          [This is purely anecdotal, not meant to be prejudicial]

          The biggest difference I've ever noticed is mostly cultural.

          It seems that Americans are more used to questioning and saying things like "are you sure you really want to do it this way??", whereas Indian programmers just seem to do what they're told, regardless of whether it makes sense.

          For example, my wife works at a large financial firm as a project manager. They had to stop giving new development to an Indian company they were working with because the work turned out to be barely functional. This was mostly due to the specs not being complete. She said she almost never got questions about the requirements and just received a bad product at the end. This same company was exceptional at porting older applications to newer technologies and they still do that today. They just don't get new work.

          Granted, the root cause of the issue was bad requirements, but American designers/developers would have balked at it and questioned it more, resulting in a better product.

          (NOTE: Some of this hesitation is probably due to fixed-price negotiations and time limits along with time zone differences and the difficulty of back-and-forth requirements gathering with people in a different part of the world. YMMV)
          • by Peter Cooper (660482) on Friday June 24, 2005 @01:11PM (#12902133) Homepage Journal
            Following the specs to the letter without discussion is a sign of either poor pay or poor management. A poor manager is one who gives out specs and expects them to be followed without question. That's not what a (good) developer (or development team) would ever do.. that's what a "programmer" would do. If you're being poorly managed or not paid enough, why argue with the manager.. it's a lot easier just to follow the bad specs and render yourself blameless even if the job turns out bad. Indeed, I'd say at least 50% of development budgets are spent on projects which never see the light of day due to this problem.
        • by arivanov (12034) on Friday June 24, 2005 @01:11PM (#12902124) Homepage
          You are dumping all Indians into one basket. That is both stupid and insulting. You have the cheap Indian software which is "you get what you have bargained for".

          That is shit.

          And here is an example of what happens if you outsource to there: Lucent spectacular VOIP failure. It was the market leader, it outsourced all of its software development on it to India around 1998 and it was no more in 6 months.

          There is also the expensive ones. The ones which cost about as much Europeans and Americans. You once again get what you have bargained for. Worked with some of these and I have been about as happy as with any American or European subcontractor.

          You should not really put all of them under the same label
        • by kannibal_klown (531544) on Friday June 24, 2005 @01:20PM (#12902258)
          I see that you're claiming that Indians are unable to produce quality software and hardware designs.


          I don't believe programmers in India are "worse" than programmers here. It's mostly a difference in communication and coding style.

          I know a couple people from different companies that have had to work with contractors in India; sending pieces of a project back-and-forth electronically. The common theme I hear them talk about is the different in coding style and the like. That alone makes it a real p.i.t.a.

          However, some have worked with firms that were just horrible (which could have easily happened if they went with a US firm).

          One friend's company handed off a project they were working on in-house to a group in India because they were getting swamped with work. The contract stated that they'd own the code and what-not, which was a biggie since this was a project that was going to evolve in the coming years. While the product worked, the actual source was useless to them; they didn't follow the company's IT section's normal routine of documentation and there was a lot of spagetti code.

          However, this sounds like an issue with a specific companies/contractors/etc and not with the country. The idea that some IT have that India is "sub-par" comes from stories of the occasional bad firm along with people's experience with the culture/language/algorithm barrier.
        • I've worked with alot of Indian programmers over the years. I'll break down the problems I've seen. 1) Cultural - India's a class based society. If you're working side by side with an Indian programmer, and he doesn't view you as his boss, he wont take any input from you... For example, you say "I need your interface to do X so I can do Y" - Indian programmer says "". ...Nothing... Interface never changes... You go to your boss and complain a few times, finally your boss tells him "change it!" and it chan
    • by lucabrasi999 (585141) on Friday June 24, 2005 @12:49PM (#12901870) Journal
      That's just the free market at work. If the price of labor is cheaper there, then that is where labor will be purchased. It's just as simple as that.

      Agreed. And, at some point in the future, the cost of doing IT in India will become expensive relative to doing IT in China or Kenya, then the same thing will happen to India that is happening here in the US.

      Of course, since India has a population of over 1 billion, I wouldn't hold my breath, waiting for that day....

  • by g0dsp33d (849253) on Friday June 24, 2005 @12:36PM (#12901691)
    I guess a programming major insn't enough. Now I need to learn Indian as well.
  • The problem ... (Score:5, Insightful)

    by B3ryllium (571199) on Friday June 24, 2005 @12:36PM (#12901692) Homepage
    The problem with outsourcing is that eventually the cheap work gets more expensive, then it becomes too much of a burden and things have to shift again ...

    So, gradually, the corporations will pick random underdeveloped countries and beef them up to a point where the workers are too expensive, then they'll move on - until there are no underdeveloped countries left, just bloated overdeveloped cesspools full of unemployed engineers and white collars.
  • by AtomicX (616545) on Friday June 24, 2005 @12:38PM (#12901717)
    'if other cost cutting mechanisms could achieve the same effect without cutting so may jobs.'"

    Probably not. For someone like IBM, labour is undoubtedly their biggest cost. If they can get equally good work from Indian programmers for a third of the cost, then I see every reason for them to do that.

    Of course it is hard on the staff, but this is only going to happen more and more as time goes on, and increased union activity is only going to encourage large firms to outsource work.

    The only way for IT workers in western countries to survive is to gain additional skills which workers in other countries lack.
  • Off-Shoring (Score:4, Insightful)

    by ndansmith (582590) on Friday June 24, 2005 @12:38PM (#12901721)
    Is it really immoral to send jobs overseas? Why do people in Europe and US deserve the jobs more than people in India? How do these reactions to off-shoring fit into our new global economy?

    [I am not saying anything either way.]

    • Re:Off-Shoring (Score:3, Insightful)

      by Cromac (610264)
      Is it immoral to send jobs overseas? Of course that is going to depend on your own sense of morality. Many people would argue that US companies should look after US jobs/workers first, just like German companies should take care of their citizens, French thieirs and so on. Caring only about the bottem line might be the best thing for the companys gain/loss columns on the annual report but that doesn't make it the right thing to do.

      Why should people worry about the global economy when it's not in their bes

    • by bstarrfield (761726) on Friday June 24, 2005 @01:13PM (#12902150)

      IBM was founded, built, financed, and supported by Western countries, principally the US, UK, Japan, and Germany. The US, especially, protects IBM's intellectual property, provides a secure environment for business, and enormous amounts of government contracts. The great bulk of IBM's customers are in the West.

      I honestly believe that IBM - and all of the firms so happily laying off their employees in order to find cheaper labour - are acting in an immoral manner. Outsourcing is destroying lives, destroying economies, for the sole point of increasing corporate profits - profits that go, essentially, to a very small percentage of the population. For goodness sake, having a 401k growing at 4% doesn't really matter that much when you're laid off.

      IBM is not trying to help Indian workers - IBM is simply trying to cut it's labor costs. Globalization has accomplished the dream of so many capitalists - labor is now a commodity, and labor is powerless.

      The American - and Western European - middle class is evaporating before our eyes. When the middle class jobs are sent overseas, the entire structure of our society is in danger. We'll became lands where the few with massive wealth dominate the increasingly poor masses. Democracy depends on a healthy middle class. Destroying that democracy is indeed immoral.

      • by KlomDark (6370)
        I find this article [servebeer.com] sums up why this mad dash to free market globalisation will just drag the whole world to a far lesser way of life.

        Partial excerpt:

        1. There is no such thing as a "free market."

        2. The "middle class" is the creation of government intervention in the marketplace, and won't exist without it (as millions of Americans and Europeans are discovering).

        The conservative belief in "free markets" is a bit like the Catholic Church's insistence that the Earth was at the center of the Solar System in
      • by richieb (3277)
        I honestly believe that IBM - and all of the firms so happily laying off their employees in order to find cheaper labour - are acting in an immoral manner.

        IBM is not an entity that can be moral or not. The company's main responsibility is to make money for the shareholders (i.e. the owners).

        As long as IBM employees do not break laws, all that matters is the bottom line...

        • by Josuah (26407)
          This is an extremely important point. As soon as a company goes public, the owners of the company are the shareholders. It doesn't matter what the officers or managers or any employee thinks. If they do not maximize profit and stock price, they will get fired.

          No one is protected from that fate, regardless of their position within a company. Carly Fiorina is a prime example of what can happen when the shareholders are unhappy. It doesn't matter if she was trying to do the "right" thing for HP's future. Even
    • Haha (Score:4, Funny)

      by kaellinn18 (707759) on Friday June 24, 2005 @01:51PM (#12902634) Homepage Journal
      [I am not saying anything either way.]

      Way to straddle the fence at the end there. Did you put that there because you actually have no opinion or were you afraid of the random Slashdot mods?

      You probably would have gotten -1 Heartless Capitalist if you'd said that the Indians should have the jobs.

      And you probably would have gotten -1 Economics 101 if you'd said the jobs should stay in the US.

      I salute your ability to attain a +4 Insightful (as of the time of this writing) without actually saying anything at all.
  • by PhotoBoy (684898) on Friday June 24, 2005 @12:39PM (#12901731)
    1) Outsource everything except the board members to India
    2) ?
    3) Profit!
  • by 0kComputer (872064) on Friday June 24, 2005 @12:40PM (#12901744)
    Individual companies can't get away with shipping jobs to India due to the offshoring stigma, so what do they do? They hire consulting firms like IBM who basically do the dirty work for them. Problem solved; good cheap labor at a fraction of the cost without it being a PR nightmare because technically the company isn't offshoring. I've seen this happening more and more. Kind of scary.
  • by CyricZ (887944) on Friday June 24, 2005 @12:42PM (#12901768)
    Does such a change pose a risk to the security of the United States and Europe? Indeed, the government and military have always been a large consumer of IBM's products. That is understandable, of course, considering the extreme reliability, durability, stability and ultimate engineering that IBM systems represent. But with the design and implementation of these systems being sent over to non-Western countries, there are always security fears. Will backdoors be inserted into IBM's software that will then be sold to Western powers? It's a very real possibility.
  • by Vandil X (636030) on Friday June 24, 2005 @12:42PM (#12901776)
    The PS3 and Xbox 360 are going to sell in droves worldwide. That's a lot of PowerPC chipsets that need to be manufactured cheaply, quickly, and consistently by IBM.

    While I don't agree with off-shoring, consider that many of the jobs that get off-shored are jobs that Americans either want too much pay/benefits for, or are jobs that are "below" them due to the scheduled_hours/tasks.

    Foreign nationals in developing countries can easily snatch these jobs up for much less pay/benefits and are actually happy/proud to have the job.
  • by lux55 (532736) on Friday June 24, 2005 @12:45PM (#12901808) Homepage Journal
    Really, this just means 14,000 more EU and US programmers can now work on IBM's Open Source initiatives without having to be on payroll. Don't programmers seem to prefer that anyway?
  • Fake Free Trade (Score:5, Interesting)

    by reporter (666905) on Friday June 24, 2005 @12:49PM (#12901858) Homepage
    When a (relatively) free market like the USA interacts with a (relatively) non-free market like India by the trading of goods and services (including labor), the free market becomes non-free. The government regulations and corruption that damages the Indian market now affects the American market. The normal market forces in the USA are now influenced/destroyed by Indian government policies that have obliterated the economic opportunities and standard of living in India.

    Similar arguments apply to illegal aliens from Mexico. Under the aegis of the North American Free Trade Agreement (NAFTA), illegal aliens flood into the USA and have essentially destroyed the wages in the market for unskilled labor. The normal market forces in the USA are now influenced/destroyed by Mexican government policies that have obliterated the economic opportunities and standard of living in Mexico. Without illegal aliens, the Americans working as unskilled labor would enjoy a sudden and dramatic boost in their wages, enabling them to actually buy medical insurance.

    When American politicians tout free trade and claim that the American market remains a free market, they completely ignore the non-free market which is interacting with our free market and which is destroying the normal market forces in a (our) free market. The rub is that no one seems to care.

    Free trade advances free markets in only one scenario: (relatively) free markets like the USA interact with other (relatively) free markets like Eastern/Western Europe, Canada, and Japan. To maintain genuine free trade, we should close our markets (including the market for services like labor) to India, China, and their ilk until those nations establish free markets. We lose nothing by championing genuine free trade.

    • Re:Fake Free Trade (Score:3, Interesting)

      by mugnyte (203225)
      I call bullshit. Comparing any market more "free" than another professes huge ignorance of trade and tarrifs, quotas and limits that exist in every industry. This, however, can be forgiven since the depth and detail of how governments adjust their markets is quite a quagmire indeed.

      Let me enlighten you just a bit: Investigate the total construction materials of commonplace items such as shoes. Specifically, leather. The US requires very exact amount of it, from US markets alone. This, in the persp
    • Re:Fake Free Trade (Score:4, Insightful)

      by RexRhino (769423) on Friday June 24, 2005 @01:46PM (#12902581)
      You have it backwards. "We" are not losing jobs because "we" (the U.S., Canada, Japan, etc.) are free market and "they" (India, China) aren't. We are losing jobs because "we" are no longer free-market.

      40 years ago the U.S. was truly free market, and China and India were truly Socialist, and economicly "we" were kicking "their" ass.

      What you are seeing now, is China and India becoming how the U.S. used to be, while the U.S. becomes like China and India used to be. 40 years ago, when the United States was the number one industrial producer, when we had the highest paid workers on the planet, and we were the best educated and had the highest standard of living, there was no such thing as outsourcing. Outsourcing is a product of the post-capitalist "welfare" state.

      Companies aren't moving to India to get cheaper labor (that is a side benifit). They are going to India because the market is MORE free than in the U.S., the taxes are lower, and the people work harder and are better educated. "We" got fat and lazy, and we want all our cheap consumer goods and government benifits, and 30 hour work weeks, and we forgot that those goods and services we enjoy are actually produced through capital and labor... not lawsuits, advertisment, and government edicts.

      The West is no longer producing anything except government. So, we are now spending our accumulated capital for imported consumer goods and government services. This can last for about 10-15 years, then the economies of the U.S., Western Europe, will have spent all their accumulated captial and will colapse.
  • Union too late... (Score:3, Interesting)

    by puppetman (131489) on Friday June 24, 2005 @12:59PM (#12902003) Homepage
    If the union had all these great ideas for cost cutting, why didn't they suggest them earlier, at some point before the axe was in it's downward swing?

    I understand why sometimes the labour and capital components of business have to have an adversarial relationship, but I also know that they need to have a co-operative relationship as well.

    It's as if the union had these great ideas for saving IBM money, but kept them quiet until IBM started to cut jobs, and they said, "Wait wait wait...".

    In the original black-and-blue article, the union made the point that IBM's "first quarter profit for 2005 was $1.4 billion, and $9 billion for the whole of 2004". Unfortunately, a corporation has a legal imperitive to make as much money as possible for the shareholders. The problem is not IBM, but rather corporations in general.

    Some of the more interesting books on the subject are,

    Myth of the Good Corporate Citizen [indigo.ca]

    The Corporation (the book that the documentary was based on) [indigo.ca]

    Confessions Of an Economic Hit Man [indigo.ca]

  • by DanielMarkham (765899) on Friday June 24, 2005 @01:14PM (#12902184) Homepage
    Gartner just released a study of the top five reasons offshore deals go bust. [infoworld.com] I hope IBM was paying attention. It sounds like a lot of companies jump into these deals because of the labor differential and then find out later it wasn't such a good deal after all. There are a lot more factors to consider than just free trade, losing American jobs, and profit. Long-term viability has got to be high on the list of things to consider, right? (My blog on this) [whattofix.com]
  • by airship (242862) on Friday June 24, 2005 @01:15PM (#12902201) Homepage
    Maybe 'Economics 101' boils down to:
    (1) Look for ways to reduce costs
    (2) Move jobs overseas to exploit cheap 3rd-world labor
    (3) Profit!

    but 'Economics 102' adds:
    (1) Cheap 3rd-world workers spend new pay on basics like decent food, shelter, and medical care, thus greatly improving their lives, but have nothing left over to purchase still relatively expensive luxury goods and services provided by their American or European employer
    (2) Unemployed or now-underemployed former American or European employees now can't afford expensive luxury goods and services provided by former employer, either
    (3) Profits evaporate as sales plummet

    Henry Ford understood this basic economic principle, and made sure his employees could afford to purchase the Model T's they built.

    'Econ 103' goes on to explain how companies that move their labor and infrastructure costs overseas still get to deduct those expenses when it comes time to pay their US taxes, but none of that money stays here to generate income tax, sales tax, and other tax revenue, so government services must shrink. And every dollar moved offshore also costs many, many more dollars lost in other goods and services that lost employees can no longer purchase, resulting in additional jobs and tax revenues lost, etc.

    It's never as simple as it first seems.
    • by advocate_one (662832) on Friday June 24, 2005 @02:52PM (#12903357)
      2) Move jobs overseas to exploit cheap 3rd-world labor

      it's not the cheap labour that matters... it's the fact that they have very poor health & safety laws and their environmental protection laws also lack teeth... this means that you can ruthlessly exploit the workforce by having them work in hazardous conditions whilst also leaving a stinking mess behind... when the mess gets to messy, just shift to somewhere else... look at the ship dismantling industry... it's all but vanished in western nations as the ship owners merely send the defunct ships to the beaches of India to be dismantled. They don't have to protect the workers or worry about disposing of any asbestos... cos the laws are non-existent for protecting the workers or the environment.

      Big corporations do not care about their workers or the countries they've abandoned... they blackmail western nations into providing massive subsidies in order to keep their plant there or build one there... I mean, look at the current stink over the tax kickbacks that Dell are getting for having a plant in Orlando...

  • Shortsighted (Score:4, Insightful)

    by EdwinBoyd (810701) on Friday June 24, 2005 @01:50PM (#12902625)
    The position that outsourcing is just good business and benefits the consumer may be true in the short term but has dire implications further down the road. By outsourcing these middle class jobs you are in effect removing the purchasing power of the former employees. The majority do find new jobs, but with lower salaries or with fewer benefits (forcing them to pay the cost). This is coupled with the fact that the US is importing more products than it exports. Which means that jobs that should involve Americans working to manufacture products for other Americans to purchase are becoming scarce as well. This leaves only the services industry which tends to pay bottom dollar salaries and provide few benefits (if any). My question is that what good are lower priced consumer goods if there is no middle class to purchase them and what economy can rely on a service based model if the service cannot be afforded?

The most delightful day after the one on which you buy a cottage in the country is the one on which you resell it. -- J. Brecheux

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