America Online, the world's largest Internet-access service, is said to be planning to hire software engineers in India, where labour costs are much lower than those in the United States, said CNET News.com.

The Time Warner giant is said to be planning to set up a development centre in Bangalore and needs Indian talent to man the centre.

"AOL's plans slipped out on its Web site in a December 10 job posting seeking a global programme manager to 'coordinate software development teams' in the United States, Dublin, Ireland, and Bangalore," said CNET News.com.

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"The posting bothered some people because it appeared at the same time AOL announced it was laying off hundreds of software engineers at its Netscape Communications unit in Mountain View, California, as well as other West Coast offices, said CNET News.com.

The move to hire Indian engineers has sparked off some protests, in line with the numerous voices of dissent that have been opposing the movement of jobs from the West to low-wage nations like India, China, the Philippines and some East Europena nations.

"It's America Online with code built where?" said one former Netscape manager, reported CNET News.com. "There's an image issue that they should address, especially with all the people they just chucked."

America Online spokesman Jim Whitney, reported CNET News.com, said that the company is contemplating hiring engineers in Bangalore, India, after the Web site News.com reported yesterday that America Online was planning to do so. Whitney declined to comment further.

"Software engineers in the United States earn an average annual salary of $75,000, according to the Labor Department. Indian software engineers can be hired for a fraction of that. That's prompted U.S. technology companies, including Cognizant Technology Solutions Corp. and Veritas Software Corp., to hire there, said CNET News.com.

AOL cut about 450 jobs in California earlier this month to reduce costs, said CNET News.com.

"Besides raising concerns about exporting high-paying, high-skilled jobs abroad, many of these workers have long griped that higher-ups at AOL allowed Netscape to falter, said CNET News.com.

AOL said the job posting and the layoffs are unrelated. "We are considering opening a small (engineering) office in Bangalore," said CNET News.com quoting AOL spokesman Andrew Weinstein. "That action is completely unrelated to the Netscape job actions that were taken."

AOL already has a call centre in Bangalore and has relied on software engineers in India previously through an alliance with Sun Microsystems, said CNET News.com.

"AOL's Bangalore explorations come as US-based businesses are increasingly tapping cheaper labour abroad, typically to handle low-level jobs such as customer service. In a newer wrinkle, some software companies are experimenting with hiring skilled programmers to assist on higher profile projects, including product development, said CNET News.com.

Google is also planning to open a Bangalore office and expects to hire 100 software engineers by year-end 2004.

Global IT consultant Gartner has predicted that one out of every 10 jobs at US information technology companies will be shifted abroad by the end of 2004.

Cost cutting is the most commonly cited reason for this practice. Hewlett-Packard has pegged the cost of a talented programmer in India at about $20,000 a year, well below the cost of a top US tech worker, said CNET News.com.

The Wall Street Journal recently reported that IBM plans to shift over 4,000 jobs to India and China.

IBM, the world's largest computer company, in one of the largest moves to 'offshore' highly paid American software jobs plans to replace 4,730 of workers at IBM facilities in Southbury, Connecticut, Poughkeepsie, NY, Raleigh, North Carolina, Dallas, Boulder, Colorado, and elsewhere in the United States, said the WSJ.