December 22, 2003
(Computerworld)
The number of U.S. IT workers losing their jobs because of offshore outsourcing is a topic that's open for debate. For example, a researcher at Boston University last week claimed that most tech staffers whose jobs get moved offshore are being redeployed in new positions.
Nitin Joglekar, an assistant professor of operations and technology management at BU's School of Management, estimated that 15% to 20% of IT workers typically are dismissed when their positions are sent overseas. But the remainder are given other responsibilities, said Joglekar, who has examined the impact of offshore outsourcing at large companies such as FleetBoston Financial Corp.
In some cases, programmers have become project managers or been put in charge of managing the relationships with offshore providers, Joglekar said. "Those people that were doing coding before are probably doing much more business analysis now," he said.
Different Findings
But Joglekar's findings are based on in-depth statistical analyses of just five companies, plus anecdotal information from about 15 others. They differ markedly from predictions made last summer by Gartner Inc., which said it expected that one out of every 20 corporate IT jobs in the U.S. would be moved offshore by 2005 and that less than 40% of the affected workers would be redeployed by their current employers .
DFS Group Ltd., a San Francisco-based company that operates 400 duty-free retail shops at airports and other sites worldwide, sends some of its IT work overseas under a combined onshore/offshore IT services contract with Cognizant Technology Solutions Corp. in Teaneck, N.J.
CIO Ron Glickman wouldn't say how many IT workers DFS has let go or redeployed as a result of its deal with Cognizant. But shifting people into new jobs isn't always a good fit for employers or the workers themselves, he said.
"I do agree that some people have been repositioned to other activities in the companies that take advantage of global sourcing," he said. "However, my personal experience has been that the aptitudes and expertise required to move from one role to another are often different enough that training will not enable the impacted individuals to excel or be satisfied in their new roles."
Dennis S. Callahan, CIO at Guardian Life Insurance Co. of America, said the New York-based insurer also farms out some IT activities to companies with offshore operations. But only about 5% of its 400-person IT staff has been directly affected, according to Callahan.
"We've done offshoring, but in a way that's minimized the staff impact," he said, noting that U.S.-based Guardian employees make up half of the company's development team. Callahan said Guardian works collaboratively with its IT services partners and distributes development work across different geographic regions.
Andrew Efstathiou, an analyst at The Yankee Group in Boston, said Joglekar's job-loss estimates map with what he's seeing. But he added that it's unclear how many workers have been able to make immediate transitions to new roles at their companies.