US companies continue to ship jobs to India despite protectionist outcry against the same.
Trade Adjustment Assistance (TAA) filings made to the US Department of Labour, Employment and Training Administration showed that outsourcing jobs to countries like India, China and Brazil displaced several hundred local workers. American workers representing companies including IBM, Honeywell, Walgreens and AT&T have filed petitions in July to receive Trade Adjustment Assistance benefits.
TAA is a federal program of the US government to assist displaced American workers impacted by imports.
IBM, for instance, is laying off 747 workers at three sites in New York. At Poughkeepsie , a city in the state of New York, 50 jobs have moved to Brazil, India and China, the US Department of Labour filings showed. Another filing by three petitioners at the company’s Austin office said service support and administration of accounts were relocated to foreign countries as cost-reduction strategy.
“Change is constant in the technology industry and transformation is an essential feature of our business model. Consequently, some level of workforce remix is a constant requirement for our business. Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans,” said an IBM spokesperson, when contacted.
Business outsourcing solutions provider Automatic Data Processing will lay off 50-100 people and the service will be outsourced to India. US-based packaging material company Sealed Air Corp has laid off undisclosed number of workers after it purchased Diversey Holdings, manufacturer of cleaning and hygiene for $2.9 bn in 2011.The firm had outsourced its internal service desk to Diversey’s third party support group – Wipro in Pune, the regulatory filing said.
Multi-channel retailer Sears Canada is laying off 245 workers, outsourcing IT positions overseas, said Financial Post. “The 138 laid-off IT employees will be replaced by Filipino workers in Sears Canada’s partnership with technology giant IBM. Sears Canada is also looking to new vendor Wipro to replace the rest of its discharged force,” the report said.
The protectionist noises haven’t deterred the prospects of the $108-bn Indian IT sector that continues to hold its stead in the global outsourcing play.
Siddharth Pai, partner and president in outsourcing advisory firm ISG Asia Pacific , said, “India continues to be a primary destination for global service delivery. Companies are going through huge cost pressures and they have figure out how to maintain their margins despite other headwinds. They will have to consider offshoring for that additional headroom.”
The new immigration bill makes it burdensome for Indian IT companies imposing a higher fees on H1-B dependent employers. “Many bills were debated. But the end of the day, it has to make business sense. The pricing mechanism changes the economics of doing business,” Sudin Apte, CEO of Pune-based IT advisory firm Offshore Insights.