Texas Business
Compiled from staff and wire reports

Wednesday, March 20, 2002


Dell will increase investments in India

With no signs that pressure on profit margins in the computer industry is letting up, Michael Dell said his company will continue to invest in India and possibly move additional jobs there.

Dell visited his company's call center in Bangalore, India, on Tuesday and said the company will increase its investment there as well as looking at whether it would be useful to "move other back-office functions to Bangalore," The Associated Press reported.

Dell is reviewing some duties that it outsources to contractors, such as payroll, and whether it might save money by bringing those operations back inside the company and moving them to lower-cost regions, said Dell spokesman Mike Maher.

Typically, back-office functions also include billing, payroll and human resources. Dell, which cut 5,700 jobs locally in 2001, has said for more than a year that most of its future growth would not be in Central Texas, where it employs about 16,000 workers.

Dell President Kevin Rollins said earlier this week that the company's use of less expensive foreign markets is a way to handle future growth, rather than an effort to move operations from the United States overseas.

Dell opened a call center in the high-tech hub of Bangalore last year to serve customers in the United States, Europe and the Asia-Pacific. Dell also has software developed in India for bundling in the company's computers and for internal use.

"India seems to be increasingly popular for call centers either for support or sales," said David Bailey, an analyst with Gerard, Klauer, Mattison. "The other huge thing is typically programming, but I'd say that's a less likely option. Dell doesn't do a lot of programming services. I'd guess it's probably expansion of the existing call center."

Dell's Bangalore call center now employs about 800 people. Indian newspapers say original plans called for the center to have as many as 2,000 employees within 18 months.

-- Jonh Pletz

[link|http://www.zdnet.com/anchordesk/stories/story/0,10738,2856761,00.html|ZDNet article]

Tech companies shipping U.S. jobs overseas? Make 'em pay
David Coursey,
Executive Editor, AnchorDesk
Thursday, March 21, 2002

Maybe I'm old-fashioned, but I think the first responsibility of American business (and consumers) is to provide jobs for Americans. I mention this today because of a call I got from a 20-something friend who works for a software company as a tech support rep.

Actually, though he calls it the best job he's ever had, he isn't strictly speaking an employee of the company. He's an independent contractor. So even though he does the same work as a regular employee, the company doesn't have to provide him with the same benefits, job security, or salary.

GOOD THING my friend is married and his wife gets benefits at her job. Otherwise, he wouldn't have any health insurance. Now I couldn't tell you why employers are responsible for providing the nation's workers with health care. But they are. And for many people, not having a job means not having decent medical coverage.


Pretty soon my friend will need more than just his wife's benefits. That's why he was calling me: He just found out his job is being exported to the Philippines, where people are happy to answer the phone and provide (mostly lousy) tech support for a lot less money than Americans.

So pretty soon my friend, who just started his career a few years ago, will be starting a new one all over again.

I'm especially sensitive to this because our economy seems to have lost many of the real jobs that once led to real careers. In their place, we've got dead-end, zero-training, zero-advancement jobs in the fast-food industry.

MY CAREER BEGAN, at age 15, working for free as a gofer at a Dallas radio station. That became a paid job and the rest, as they say, is history. But those jobs don't exist anymore, thanks to automation, deregulation, and consolidation in the broadcasting industry. How does the next kid follow in my footsteps?

I am not sure what happens if we can't provide decent opportunities for young people to experience the joys and gain the experience that comes with real work--but it can't be good. Are we really happy with an economy where an estimated one in eight workers gets their first job at McDonald's? Would I have had a radio career if my first work experience had been under the Golden Arches?

Another friend, this one an executive at another big software company, is permitted to hire whomever he wants--as long as they live in India or Australia. Why? Because labor is much less expensive there than in the U.S.

So we've got one company that's closing a support facility here to move it to Asia, and another that doesn't even try to fill jobs at home. There's something vaguely unpatriotic about all this. Especially when the jobs are things like answering the phone to talk to American customers or developing programs to be sold primarily to American companies.

WE NEED TO remove some of the incentives for companies to export jobs. How? One way would be to require companies to follow American minimum-wage laws when they hire overseas. Let's also make them pay the same wages overseas they would pay to hire the same worker in the U.S.--along with the same package of benefits. We could also require companies to show the job could not be filled in the U.S. before exporting it.

Please note that I'm talking about jobs where the people providing the service and the customers live in different countries. Telephone-support reps and programmers are just two examples, but you could apply the concept to many other jobs.

I think it's fine that people in Thailand answer calls from Thailand, maybe even calls from all of Asia. But if they are answering calls from the U.S., the companies that hire these people ought to prove the Thai workers aren't taking American jobs. And if they aren't, pay them like American workers.

The other thing I'd like to do is to treat revenue generated overseas as an import. And establish a duty that, again, makes it roughly as expensive to do the work overseas as here at home. For example, if 20 percent of a new database was coded overseas, then 20 percent of the revenue from that product should be treated as an import. Support and other services provided offshore could be treated in the same way.

IS THIS PROTECTIONISM? Sure it is. I'm sure a panel of noted economists will be happy to convene and tell me that I'm nuts. Well, let them come up with something better. I'm open to suggestions.

The future of the American workforce requires close attention--and not just an eye to the bottom line. We've seen other industries--textiles and steel among them--move overseas. Formerly high-paid jobs like meat cutting have been replaced by low-skill, cheap imported labor.

If this sounds like I am proposing unionization for technology industries, I'm not there yet. But if the companies don't take a closer look at their enlightened self-interest, then only bad things--more regulation or the much-hated unions--are in store.