1 in 10 US tech jobs to move overseas

NEW YORK: One out of 10 jobs in the U.S. computer services and software industry could shift to lower-cost emerging markets such as India or Russia by the end of 2004, a top computer consultancy said.

Gartner Inc., the world's biggest high-tech forecasting firm, said in a report entitled "U.S. Offshore Outsourcing: Structural Changes, Big Impact" that 500,000 of the 10.3 million U.S. technology jobs could move just in 2003 and 2004.

While professionals in the computer industry itself are likely to bear the brunt, the report predicts that one in 20 tech jobs in industry-at-large also could be moved overseas.

This is especially true in industries with high concentrations of knowledge workers such as banking, health care and insurance, the author of the survey said.

"Suddenly we have a profession -- computer programming -- that has to wake up and consider what value it really has to offer," Diane Morello, a Gartner vice president and research director who studies work force issues said in an interview.

"Offshore outsourcing" is the euphemism the computer industry uses to describe the transformation of software development, computer services and customer call-center work.

As a global economic recession has hit hard over the past two years, U.S. companies have embraced as never before a decades-old trend to hire educated workers overseas who can be employed for a fraction of the cost of U.S.-based programmers.

Just last week, software maker Siebel Systems Inc.of San Mateo, California said it would cut 9 percent of its work force, or 490 jobs, and planned to move some operations overseas.

Executives of the world's largest computer and services company, IBM were quoted recently as saying they had no competitive choice other than to expand software and semiconductor development overseas. The comments came to light in a recording supplied by a union seeking to organize IBM workers and supplied to Reuters. IBM now employs 5,400 workers in India out of a total work force of 316,000.

A JOBLESS TECH RECOVERY?

The debate by economists over whether the United States may now be experiencing a jobless economic recovery echoes disputes over high-tech job losses that heated up during the last technology recession a decade ago. These petered out quickly in the Internet boom of the late 1990s.

The recent acceleration of job losses actually began during the late 1990s when shortages of qualified U.S.-based workers led companies to turn overseas to countries such as India, Ireland and elsewhere for computer and Internet project work.

The mounting job losses are heating up as a political issue, with bills put forward by legislators in five U.S. states that would require workers hired under state contracts be American citizens or fill a special niche citizens cannot fill.

Morello said her study did not speculate on where such jobs were moving. But she indicated that India, Russia and other countries in Southeast Asia were the most likely locations.

She also pointed to how Canada has moved recently to position itself as a "nearshore" alternative to companies who have trouble shifting jobs to more distant "offshore" locales.

Electronic Data Systems Corp. of Plano, Texas, the world's second largest computer services provider, has already reached into Canada and many points beyond. EDS has begun promoting its "Best Shore" strategy of positioning software and customer service work in what it says are the most cost-effective locations around the globe.

EDS has 16 centers that range from New Zealand to India to Egypt, Poland, Brazil, and Canada.

The Gartner analyst said that based on her preliminary calculations that one in 10 software services jobs are at stake at computer vendors and 5 percent of technology jobs in the wider corporate world, at least 500,000 jobs will be moved.

© Reuters