IBM To Move Thousands Of Tech Jobs Overseas Southbury Office
Among Those Affected By `Offshoring'
December 16, 2003
Associated Press
ARMONK, N.Y. -- IBM Corp. plans to move up to several thousand skilled software
jobs from the United States to India, China and other countries, which could
amount to one of the biggest such actions yet in the technology industry.
IBM documents obtained by The Wall Street Journal said about 4,700 programming
jobs could be shifted overseas to save costs, a growing trend in the high-tech
industry known as "offshoring."
More than 900 people are already scheduled to be told of the move in the first
half of 2004, while another 3,700 jobs have been identified as having the
"potential to move offshore," the Journal said. IBM already has hired
500 engineers in India to take on some of the work that
will be moved, the Journal reported.
The division affected is IBM's Application Management Services group, part of
Big Blue's huge technology services division. The IBM facilities where workers
could be replaced include offices in Dallas, Southbury, Conn., Poughkeepsie, N.Y., Raleigh, N.C., and Boulder, Colo.
IBM would not break out how many employees work at its Southbury campus or what
divisions they work in. But a union source estimated that about 2,000 people
work in Southbury and that60 to 70 percent of them are programmers.
IBM spokesman James Sciales said he would not comment
on "internal presentations" but noted that most of IBM's workforce,
which now totals 315,000, has been overseas for years. Sciales
also released a statement saying IBM expects hiring in the United States next year will match or exceed 2003
levels.
While companies began moving manufacturing jobs and other blue-collar work to Asia long ago, big business is now
increasingly shifting skilled work there as well. According to International
Data Corp., foreign workers performed about 5 percent of information technology
services for American companies this year, but by 2007, that share will grow to
23 percent.
Often, the American workers being replaced are called upon to train their
overseas replacements. The same will be expected of IBM employees whose jobs
are being transferred, according to the Journal.
In a speech this fall, IBM chief Sam Palmisano
defended the practice of going to Asian countries for skilled labor, saying
those nations not only offer lower wages but also have invested heavily in
education and modern communications networks.
He said the United States should respond with increased
investments of its own to remain innovative.
"China, India, South Korea and other rapidly developing
nations are replicating the structural advantages that historically have made
the U.S. the center of innovation," Palmisano told the Council on Competitiveness in Washington on Oct. 30.
"We can't - shouldn't - regret improvements in other nations'
competitiveness. Their people deserve to participate fully in the benefits of
innovations."
IBM shares were down 60 cents to close at $92.11 on the New York Stock
Exchange.