Xerox CEO, an Obama appointee, may send jobs to Indian firm

Xerox employees were told last week of a possible deal with Indian offshore firm HCL

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"It becomes increasingly clear that to win, we have to partner with other industry leaders," McKee said.

Among the topics being discussed by Xerox employees is a remark made by Vineet Nayar, CEO of HCL Technologies, in 2009, when he reportedly called most American college graduates "unemployable."

The only prior indicator that changes were ahead at Xerox was an internal webcast earlier this year describing a plan to cut some research and development engineering costs to one-third of current levels, the affected employee said. Asked about that, McKee said, "We have never said we would reduce R&D spend." The company has said "that we will be shifting our revenue mix to a higher percentage of services, a business that is targeted to grow between 6% and 8% by 2012. To support that, we have clearly indicated our R&D focus will also shift to a services-led, technology-driven business."

He added, "More than half of our revenue now comes from services. We will continue to shift R&D to support the direction the company is moving in."

Burns will have a "huge impact" on what happens to former Xerox employees, said Ron Hira, an associate professor of public policy at the Rochester Institute of Technology who has testified in Congress about the impact of outsourcing. Among the things Xerox will control is how many employees are retained and how many will be transferred to HCL.

"Xerox will also control whether HCL hires American workers or brings in guest workers on H-1B and L-1 visas," Hira said.

What typically happens in an outsourcing agreement is that some workers are laid off, generally those who are older and have higher salaries, Hira said.

If Xerox follows the practices of other outsourcing agreements, Hira said, "some Xerox workers will be kept on in a transitional phase, where they will be laid off some months in the future but they will be asked to train their HCL replacement. Sometimes this is sweetened with severance, but given the current job market, that sweetener won't be very generous."

HCL, according to Hira's research, largely relies on L-1 visas to transfer its overseas employees to the U.S. Last year, the company used 85 H-1B visas and 2,935 L-1s.

Hira believes that Burns will not favor investments that create jobs in America over countries with lower-cost labor.

"By overstocking his export council with so many CEOs, President Obama has set it up to fail," said Hira. "There's no way that Ms. Burns or any other CEO [on the council] will allow solutions that help American workers and the American economy but at the expense of profits and compensation for upper management."

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

Copyright © 2011 IDG Communications, Inc.

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