The American technology industry has been shifting jobs out of the country for decades, in large part to India.
Companies such as Google and Microsoft employ thousands of people in India, while other large companies, such as Oracle, Dell, and IBM, employ a majority of their workers outside the United States. The trend toward globalization is an example of the type of outsourcing the Trump administration wants to reduce.
Today, IBM employs 130,000 people in India, according to a new report by The New York Times. That number represents about one-third of its total workforce, with the company employing more people there than in any other single country, even more than it employs in the U.S.
The company has nearly doubled the number of its employees in India since 2007, and its U.S. workforce is shrinking at the same time. Yet outsourcing to India has been vital to keeping costs low for IBM, as they have posted 21 consecutive quarters of revenue declines, the report states.
According to the Times: “Although IBM refuses to disclose exact numbers, outsiders estimate that it employs well under 100,000 people at its American offices now, down from 130,000 in 2007. Depending on the job, the salaries paid to Indian workers are one-half to one-fifth those paid to Americans, according to data posted by the research firm Glassdoor.”
Low-cost employees seem to be the draw for American technology companies – especially to India, which has technically-trained, English-speakers willing to take the lower wages.
A chart in the report highlights the number of Indian employees at six American companies, versus their overall workforce:
Company/ Employees in India/Overall workforce
Alphabet (Google)/ 1,800/72,000
According to the Times, an associate professor of public policy at Howard University who studies globalization and immigration, Ronil Hira, said IBM’s outsourcing success in India shows that even the best-paying American tech jobs are at risk.
“The elites in both parties have had this Apple iPhone narrative, which is, look, it’s O.K. if we offshore the lower-level stuff because we’re just going to move up,” he said. “This is a wake-up call. It’s not just low-level jobs but high-level jobs that are leaving.”
IBM caught the attention of President Donald J. Trump who, during a November campaign rally in Minneapolis, accused the company of laying off 500 Minnesotans and moving their jobs to India and other countries, a claim IBM denied.
President Trump maintains that too many foreigners are taking tech jobs from Americans. He signed an executive order in April which discouraged the granting of H-1B temporary work visas for lower-paid tech workers.
Each year, H-1B visas are distributed by lottery. Technology companies say they rely on the H-1B program, claiming that the United States has a shortage of skilled technology workers.
After drawing President Trump’s attention, IBM’s chief executive, Ginni Rometty, pledged to create 25,000 new American jobs, and has also “discussed with the new administration plans to modernize government technology and expand tech training for people without four-year college degrees.”
Yet IBM maintains that the company decides where to put jobs based on where it can find “enough qualified workers.”
To that end, the Trump administration announced a new directive Monday, which will boost the U.S. government’s support for science, tech, engineering and mathematics (STEM) and computer science education, including coding. The funding for technology education is meant to prepare Americans for future high-demand, computer-science careers.
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