Posts Tagged ‘Jobs’

Fury and fear in Ohio as IT jobs go to India

November 10th, 2015

The IT workers at Cengage Learning in the company’s Mason, Ohio offices learned of their fates game-show style. First, they were told to gather in a large conference room. There were vague remarks from an IT executive about a “transition.” Slides were shown that listed employee names, directing them to one of three rooms where they would be told specifically what was happening to them. Some employees were cold with worry.outsourcing24

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The biggest group, those getting pink slips, were told to remain in the large conference room. Workers directed to go through what we’ll call Door No. 2, were offered employment with IT offshore outsourcing firm Cognizant. That was the smallest group. And those sent through Door No. 3 remained employed in Cengage’s IT department. This happened in mid-October.

“I was so furious,” said one of the IT workers over what happened. It seemed “surreal,” said another. There was disbelief, but little surprise. Cengage, a major producer of educational content and services, had outsourced accounting services earlier in the year. The IT workers rightly believed they were next.

The employees were warned that speaking to the news media meant loss of severance. Despite their fears, they want their story told. They want people to know what’s happening to IT jobs in the heartland. They don’t want the offshoring of their livelihoods to pass in silence.

The employees remaining at Cengage have begun training their replacements in person and via the Web. Their work is being “shadowed” and recorded. Their jobs will end in January.

Cengage, in an email statement, acknowledged a reduction in the workforce of 75 positions. An additional 20 positions have been moved to Cognizant and most employees have accepted those positions, the firm said.

Susan Aspey, senior vice president of public affairs for Cengage Learning, said in an emailed statement that the “business is evolving and we now serve more customers with software than print materials.

“Over a period of nearly a year, we reviewed our technology systems and staffing,” Aspey wrote. “We were very transparent with the team about this process. We determined that we needed a more flexible staffing model that could better serve the cyclical nature of our business, and a different model of software support for our customers. To do this quickly and efficiently, we needed the support of an outside partner. We chose Cognizant, a U.S. firm that supports several companies in the education industry.

“This was a very difficult decision, as we value all of our nearly 4,000 U.S. employees and their contributions.”

Cognizant, based in Teaneck, N.J., employees about 219,000 people, most of them in offshore locations.

It’s not clear how many people Cognizant employs in the U.S., but in 2013, David Amsden, the form’s vice president of human resources, put that number at 27,000. Overall, Cognizant employed more than 171,000 at that point. (Computerworld has asked Cognizant for an updated number.)

Cengage employees offered a job with Cognizant had little choice but to take it. If they rejected the offer, they would leave without severance, said IT workers. The severance offered is two weeks of pay per year of service.

The Web-based workers that the Cengage employees are training to take over their jobs are believed to be in India.

Cognizant applies for thousands of H-1B visas annually, and is one of the top three users of the visa, according to government data. Cengage employees reached for comment didn’t know what visa, if any, the contract workers in their offices were using. But they said some of these workers spoke a foreign language in the office, along with English.

The idea that their work is being taken by foreign workers is very unsettling, according to the Cengage workers interviewed.

“The jobs are being replaced offshore, and I don’t think people even understand what’s happening here,” said one IT worker, who pointed out that good opportunities were scarce. “The jobs out there are pathetic.”

Said another worker about offshore outsourcing: “I think it’s what’s killing the American economy — the middle class jobs are going away.”

Cengage is based in Boston, but runs IT operations in Mason as well as in other states. The layoffs affected workers across IT, including networks, desktop support, database administration, developers, data warehouse and other systems.

The U.S. Bureau of Labor Statistics reported Friday that the labor market grew by 271,000 jobs in October. But Victor Janulaitis, CEO of Janco, a consulting firm that studies the IT labor market, says IT hiring has been weakening compared to earlier this year.

There were about 10,200 IT jobs created in October, but the trend is slowing, said Janulaitis. In July, 17,000 IT jobs were added; in April and January, the number of jobs added was 16,000 in each of those months.

On Friday, Janco reduced its IT job growth estimate for 2015 from 160,000 to 145,000.

The number of jobs is still positive, but the situation varies regionally. Ohio has been hurt by a decline in manufacturing that has also reduced IT work.

Offshore outsourcing is having “a fairly strong impact” on IT employment, said Janulaitis. Students coming out of college are facing trouble starting a career “and a lot of that is driven by jobs that are taken by non-U.S. nationals in our economy, and a lot of that is H-1B [visa holders],” he said.

“Why are we talking about more H-1B visas for people when we have people who are unemployed?” said Janulaitis.

The IT offshore industry relies heavily on H-1B workers to deliver services, and large offshore firms, both in the U.S. and in India, are the largest users of this temporary, non-immigrant, work visa. The issue is getting a little more attention in the unfolding 2016 presidential contest, but it remains to be seen whether this attention will have any impact.

Sen. Sherrod Brown (D-Ohio) was one of 10 senators who asked in April for an investigation into the use of H-1B visa workers to replace IT employees at Southern California Edison.

With Sen. Chuck Grassley (R-Iowa), Brown also tried to amend the 2013 Senate comprehensive immigration bill with a provision requiring a business to first offer a vacant position to an equally or better qualified American worker before seeking an H-1B visa worker. The amendment failed. Grassley opposed the overall bill, but Brown voted to support it. The final bill, never adopted by the House, included provisions for increasing the base H-1B cap from 65,000 to 180,000.


Genpact outsourcing jobs to India

April 9th, 2015

Genpact, a company in the Hanover Industrial Estates, will send some jobs to India, a spokeswoman confirmed.Outsourcing22

Kraft Foods outsourced its business operations to Genpact last year and employees previously expressed concerns about their jobs being sent to India.

Genpact spokeswoman Gail Marold released a statement Wednesday reading, “Locations are evaluated and adjusted based on the needs of the business and the client as part of the normal course of operations; it’s not uncommon for some work to shift from one center to another.”

“In its ongoing effort to best serve its clients, some work based in Wilkes-Barre will move to India,” Marold said. “Genpact will make every effort to provide other opportunities to as many of the affected employees as possible.”

Marold would not say how many employees’ jobs are being impacted.

“For competitive reasons, we can’t discuss details of any specific client engagement,” she said. “We can confirm that, as part of our ongoing effort to best serve our clients, some work based in Wilkes-Barre will move to India. This is the normal course of business and it’s not uncommon for us to shift some work from one center to another. We have communicated this to our teams, and we will make every effort to provide other opportunities to as many of the affected employees as possible.”

In March last year, a Kraft employee provided an internal document that said, “Beginning July 2015, FTE (full-time equivalents) will begin to transition to Genpact’s India facility.”

The document, a bid form, valued the deal between Kraft and Genpact, at $140 million.

Two employees, speaking on the condition of anonymity, said the internal document was put on an intranet website and circulated among workers.

Prior to that, officials from Kraft Foods and Genpact reassured about 350 employees who worked there at meetings at the Woodlands Inn and Resort in Plains Township that they would be hired by Genpact and would move to the company’s expanded nearby facility in the Hanover Industrial Estates.


Mass opposition to outsourcing of SBC IT jobs

March 20th, 2015

More than 60 Scottish Borders Council IT staff joined union officials at a mass meeting this week to voice fierce opposition to plans to outsource 80 jobs.Outsourcing7

Employees in the information and communications technology (ICT) service at the local authority were briefed last week on the findings of a comprehensive review, including a proposal for a joint arrangement with City of Edinburgh Council that would see 80 council IT staff outsourced to a support company provider in October.

But at a packed meeting with Unite union officials in a Galashiels hotel on Monday night, there was unanimous anger and opposition over the proposals.

So serious does Unite consider the situation that its deputy regional secretary, Mary Alexander, travelled to Galashiels to address the IT workers.

And Tony Trench, Unite’s regional industrial officer, says another meeting will be held next week and there will also be a petition launched.

“And it’s not just IT staff at the council who should be worried about their jobs, IT staff at places like NHS Borders should also be concerned,” said Mr Trench.

“We disagree totally with plans to outsource any jobs and want to see the figures that have been used to justify this.”

Monday night’s meeting was also attended – as observers – by SBC Conservative councillors Michelle Ballantyne and Gavin Logan.

Conservative opposition group leader Mrs Ballantyne said the briefing given to elected members this week had left a lot of unanswered questions.

“We will be seeking answers and further information before we can consider what is the right decision for the future of ICT in the council,” she said.

“We certainly won’t be pushed blindly into agreeing to outsource the service and will need to be convinced by substantial evidence that this is the best solution.”

And in an email to all 34 councillors last week from one disgruntled IT staff member at SBC, elected members were urged to join the fight against the outsourcing of jobs.

“IT staff can earn more in the city, but we stay because we love our jobs, the quality of life the Borders has to offer, and we want to stay in the area,” stated the email.


IBM signs nine year IT outsourcing deal with Birla Sun Life Insurance

February 9th, 2015

IBM has announced that Birla Sun Life Insurance (BSLI), the life insurance arm of the Aditya Birla Financial Services Group, signed a nine year IT outsourcing deal with IBM to consolidate, redesign in-scope applications and use analytics to provide client insights that build competitive advantage. BSLI will leverage mobility and cloud solutions developed by IBM Research and the IBM India Software Lab to achieve increased revenues, reduce costs and enhanced profitability.Outsourcing66

BSLI in this partnership with IBM will adopt a first-of-a-kind technology solution to the insurance sector that will radically transform the business technology model. BSLI will leverage IBM’s business consulting, application development and maintenance services to drive process efficiencies and transform the business towards better outcomes for customers and employees. Tailor-made solutions from IBM will bring process maturity best practices, IT portfolio consolidation and introduce innovative tools.

This deal could help BSLI realize a cost reduction advantage from consolidation of IT vendors. IBM’s flexible pricing model will enable dynamic ramp up/down and consumption based operational spending along with a roadmap to modernize, consolidate and rationalize the application portfolio, bringing in speed and reduced time to market.

Speaking on the occasion, Mayank Bathwal, Dy. CEO, Birla Sun Life Insurance said, “We at Birla Sun Life Insurance are committed to offering an enhanced experience to our customers while improving on efficiencies and profitability of the business. We believe that this winning partnership with IBM will help us excel and stay ahead of the curve in this fast evolving life insurance industry, while addressing all business needs. IBM’s vast experience and technology capabilities will add tremendous value to our business.”

“IBM remains committed in the transformation of the BFSI industry catalyzing growth and inclusion. We are pleased to partner with BSLI to help leverage leading technology solutions like cloud and analytics to make critical strides in achieving business transformation, improving service delivery and increasing customer satisfaction,”said Vanitha Narayanan, Managing Director, IBM India. “We will bring our local and global expertise and capabilities to fuel BSLI’ expansion and growth in this dynamic Insurance industry in India.” she further added.


BPO firms cited for creating more jobs

December 8th, 2014

Pasig City Rep. Roman Romulo, chair of the House committee on higher and technical education, has cited the country’s 45 largest business process outsourcing (BPO) providers and the back offices of global firms for driving the creation of new high-paying jobs.Outsourcing17

“These leading players in the BPO and information technology … sector are now among the nation’s biggest employers,” said Romulo. “They have helped ease joblessness among fresh college graduates and young professionals in a big way.”

Romulo also said he is counting on the 45 firms to spearhead the generation of more than 248,000 new jobs in the sector over the next two years.

The BPO companies’ combined revenues reached P250 billion ($5.9 billion) in 2013.

Romulo is author of the Data Privacy Act of 2012, which has encouraged transnational firms to either establish new back offices in Manila, or to transfer their noncore, business support activities to independent BPO firms operating here.

The BPO and IT-enabled services industry now directly employs 1.052 million Filipinos.

The industry is projected to yield up to $27 billion in annual revenues and engage over 1.3 million Filipinos workers by 2016, according to the IT and Business Processing Association of the Philippines, which has 229 member firms.


Analysis And Procurement: Where The IT Jobs Will Be

November 19th, 2014

In a panel discussion with three prominent local chief information officers (CIOs) earlier this week at the event, those two familiar ideas kept recurring. Firstly, the need for IT workers to truly “understand the business”, with analytics as one way to add value in that area. Secondly, the need to be able to manage an increasingly diverse set of suppliers, especially when individual business units are sourcing their own tech.Outsourcing2

The upside is that this can change the approach to IT from a traditional penny-pinching mentality. “In our organisation we’re seeing a massive shift in demand from the business and as we demonstrate understanding of the business, we’re seeing lots of opportunities,” said Shaun Nesbitt, CIO for SEQ Water. “In the past all we had was a focus on cutting costs.”

Even when departments source their own tech, central IT can play a role in making sure data from those systems is cross-referenced and analysed, Nesbitt said. “The value IT brings to the table is the ability to look across silos.”

“In terms of skills, we’ve had to make some pretty tough decisions. We know we can’t do everything, and we know industry can do some things much better, hence there’s an increase in vendor management skills — so you can pick the right ones.”

That task has been exacerbated through the mergers of various authorities to form SEQ Water: “there’s a whole bunch of spaghetti that needs to be unravelled,” Nesbitt said.

For more specialised IT tasks, outsourcing remains a popular choice, which again brings procurement and vendor management skills to the fore. “The answer for me is outsource every time,” said Ross McKinnon, CIO for jewellery chain Michael Hill. “If I had to skill my guys on putting chips on motherboards or learning C, it’s going to take a lot longer than two years.

McKinnon’s preferred approach when outsourcing is to ensure some level of skills transfer, so there isn’t an ongoing dependency. He’s also a big fan of numerous small pilots, though that does mean not everything will succeed. “It means lot more piloting. We’ve had one running in three US stores for two months and we’ve found lots of bugs. Another has been running in Queensland for six weeks virtually bug-free, so we want to roll that out in January. The ability to work quickly and for shorter periods is going to become increasingly important.”

“The fundamental change is changing from the boxes and wire to information as a resource — being able to tap into information as a resource is a classic conundrum,” said Chris Turnbull, CIO for Queensland Treasury and Trade. It’s a technology issue that isn’t resolved by technology. At a practical level, the skills we need in house are markedly different: business analysis skills, and vendor management and procurement skills.”

Enforcing those changes is also complicated, Turnbull said. “There’s a management challenge there to understand the philosophy, the religious zeal for doing things in a particular way.”

Ultimately, IT isn’t going away. “Somebody always needs to interpret the technical world to an organisation, but it comes down to how that technology is used,” Turnbull said.


Beware Techies: Jobs in IT companies will fall by 50%

November 11th, 2014

In a major setback for lakhs of engineering students, a research report by Crisil claimed that new hirings in Information Technology (IT) sector are likely to drop by 50 per cent over the next four years. Outsourcing26

The report might become deadly for aspiring techies across the country as the IT sector is one of the biggest employers in the private sector in India. While Crisil had predicted IT hiring at 1.05 lakh during the fiscal year of 2013-14, it has predicted a mere 55,000 hiring by 2017-18.

Currently, at least 24 per cent of total private sector jobs are created by IT companies in the organised sector. Economy of the country may see a major impact if the IT sector indeed drops number of hiring by 50 per cent. Here it can be mentioned that more than 7 lakh engineering students graduate every year.

Why IT sector may drop new hiring:

According to the report, jobs in the sector is slowing down because margins in the $118 billion outsourcing industry are under pressure. Indian IT giants such as Infosys, Wipro, TCS earn nearly three fourth revenues from North America and Europe. Both America and Europe are under pressure while it comes on growth. Hence, clients are asking companies to cut costs.

In its report, Crisil said that since employee salaries account for the biggest cost component for IT companies, domestic outsourcers are reducing bench strength, improving employee utilisation rates and reducing other operational costs. In 2013-14, employee cost accounted for over 60 per cent of total cost of IT companies, added the report.

According to sources, IT companies have been planning to migrate towards fixed price contracts. It will help the companies to eliminate the need for maintaining a large workforce for billing purposes. Such contracts weigh on hiring as revenue per employee goes up, Crisil notes.


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