ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

IBM Outsourcing and Impact on Domestic Employment

Updated on October 2, 2017
jackclee lm profile image

Jack is currently a volunteer at the Westchester County Archives. Jack has worked at IBM for over 28 years.

Introduction

It was revealed recently that one third of the employees of IBM are located in India. How is this possible?

- Oct. 2017

Background

IBM is an international corp. that was founded in 1911 by Charles Flint. It is now a global company with presence all over the world. I was an employee from 1074-2002 first in the Communications Product Division and later at the reknown Research Division at Watson Lab. At its height, IBM was on the top 10 list of Fortune 500 with worldwide employees above 400,000 people. IBM was lead by Thomas Watson Sr. and later his son Thomas Watson Jr. back in the 1960s which took a gamble and invested in the new business machines of the modern programmable computers. The success of the 360 series of computers pave the road for its domination of this industry for the next 40 years.

In recent years, the company has suffered from changing technology to a web based and distributed computing environment. The main frame computer, the bread and butter of IBM, is on the decline. In 2002, the company bought PWC in an attempt to branch out to the consulting business.

PWC Consulting

Price Waterhouse was one of the big 8 accounting firms in the 1980s. After a huge scandal with Arthur Anderson, the acoounting firms broke up into smaller units. PWC was one such companies that focused on consulting Services. It became profitable for some companies to oursource some of their workforce overseas. The price of labor was lower by a factor in India and later China. In 2002, IBM was struggling to re-invent themselves.

IBM bought PWC in an attempt to expand more into the consulting services. The problem with outsourcing is that it is a one time savings event. The other issue has to do with logistics. In IT for example, there is a time difference between India and the mainland US. The language is also a huge drawback. Many Indian workers speak English with an accent. It is hard for US customers to communicate with tech support when they are based in India.

The Expanding Nature of Outsourcing

In the case of PWC, their expertise in consulting leads to providing their customers with similar advice. For example, my wife works at Philips who is a customer of PWC. IBM provided the guidance to help Philips outsource their IT group to India. When my wife, who works from home, had an issue with her laptop, she needed to contact the IT support based in India. Needless to say, it was not a pleasant experience.

Not Just Outsourcing...

Another work related trend was for large companies to close down their offices and convert their employees to telecommute. This was advantageous for mom's in the workforce and also saves companies on office space and infrastructure. On surface, it seems like a win win. However, it leads to abuses by some employees who use this to play hooky while on company time. It also created an environment where workers tend to have less face to face interactions with their peers.

In a reversal, in recent months, Yahoo and IBM has ordered their employees back to the office. It seems to me, it should have been obvious that extended work at home cannot be good for any business. Where is the teamwork that is so crucial to any business?

The Trump Era - MAGA

When President Trump was elected in 2016, there was a rush of business leaders to support his Make America Great Again agenda. They announced efforts to hire US workers and building new plants and bringing jobs bsck from overseas. The CEO of IBM, Ginni Rometty was one such executive. However, it was an empty promise. While hiring a token number of employees, they were outsourcing big time and advising their clients to do the same.

IBM Revenues...

It is reported that IBM has declining revenues for 21 straight quarters. With all the outsourcing, IBM has not generated any growth. The savings from these actions and the sale of many assets are only one time events. IBM has no where to go but down.

Declining IBM Stock Prices

Summary

The impact on the US employment rate cannot be under stated. It is a shame that American workers are being systematically replaced by foreign workers and in some cases forced to train their replacements. The granting of H1B VISA to foreigners is also a point of contention. Why is our large international corporations pushing for these VISAs when our own workers are being laid off in large numbers? These VISA were suppose to be for specific skills that we lack domestically. They are being abused by Microsoft and Google and Amazon and many high tech companies. The American workers are the sacrificial lamb at the alter of globalism.

© 2017 Jack Lee

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)