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1 in 10 US tech jobs may move to India

A Correspondent in Mumbai | July 30, 2003 12:45 IST
Last Updated: July 30, 2003 13:42 IST

By the end of 2004, one out of every 10 jobs in American software industry will move to inexpensive emerging markets like India, Russia and China, as US companies rush to cut costs, according to global research agency Gartner Inc.

But India, which has captured the largest proportion of white-collar jobs exported from the United States, is seen to be the biggest gainer amongst all developing nations.

Outsourcing and India: Complete Coverage

"Almost 500,000 white-collar American jobs have already found their way offshore to the Philippines, Malaysia and China... But no country has captured more American jobs than India," a media report said.

Pointing out that computer programmers in India could be employed at only $6,000 per annum as compared to $60,000 in the United States, ABC TV said stopping this "white-collar exodus" was difficult.

"Just as millions of American manufacturing jobs were lost in 1980s and 1990s, today white-collar American jobs are disappearing. Foreign nationals on special work visas are filling some positions but most jobs are simply contracted out overseas," it said.

"You're not going to turn the tide on this in the same way as we couldn't turn the tide on the manufacturing shift," John McCarthy, director of Research at Forrester Research, who has studied the exodus of white-collar jobs overseas, was quoted as saying by the channel.

Meanwhile, Gartner, the infotech forecasting and research firm, said that professionals in the computer industry will bear the most brunt, and predicts that one in every 20 tech jobs in the wider corporate world might also be moved overseas.

Only 40 per cent of those who have lost jobs are likely to be retrained and re-deployed by their company, Gartner said.

In a report 'US offshore outsourcing: Structural changes, Big impact,' Gartner said as many as 500,000 jobs in the US software and computer services arena, from a total of about of the 10.3 million jobs, might shift to countries like India within the next 18 months.

Although the research agency has underscored the economic benefits of business process outsourcing, it has warned against the impact that the BPO thrust may have on business strategies. The agency has said that companies run the risk of loss of future talent, loss of intellectual assets, and loss of organisational performance due to rising outsourcing.

Giants like Microsoft Corp, Oracle Corp, TM plan to shift work and jobs to India to reduce expenses. America's software industry is likely to move about 3.3 million service jobs from the US to lower-cost countries over the next 15 years, Forrester Research Inc. had estimated earlier.

With the global economy in a state of slump due to a variety of factors -- the Iraq war, the SARS virus, the tech bubble-burst, etc -- companies are struggling to keep afloat. With revenue streams drying up or trickling in slowly, most US firms have been forced to cut costs and jobs and shift part of their operations overseas.

These overseas markets -- like India -- provide highly educated and skilled employees at a fraction of what such workers cost in America.

Outsourcing has clearly become the fastest growing IT industry segment and that means for the US workers tough times have just begun.

As more and more jobs are being moved away from the US, there is clearly an environment bubbling with tensions that many American politicians have recognised.

In the last few months, a spate of legislations to block everything from outsourcing of government contracts to L1 (business) visas and reduce the number of H1-B visas available have been introduced by the US lawmakers.

Much of the legislation in the US against outsourcing is also seen to be politically motivated and as an attempt to capitalise on the emotive issue of local people losing jobs to outsiders.

Analysts and industry experts have, however, maintained that outsourcing is not new to the US, with manufacturing jobs having been outsourced before.

Additional inputs: PTI

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