Outsourcing Software Jobs Overseas

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Outsourcing Software Jobs Overseas

Information Technology (IT) Outsourcing overseas in which a company hires another company abroad to take over some of its software related tasks like managing data center, handling technical support and software maintenance has become a growing trend today. American technological corporations desperate to cut costs are outsourcing jobs to the developing countries with large talented human resource pool for significantly lesser wages.

IT market research firm Gartner Dataquest 1 says that companies outsourcing their software jobs see lower cost foreign labor as a key to growth in 2003 because of large pool of highly educated English speaking workers in countries like India and Philippines who get relatively low wages. As of year-end 2002, there were at least 14 mega deals worth a total of $28.4 billion compared with nine mega deals in 2001 worth a total of $15.1 billion. Companies are lured towards the savings obtained by hiring a programmer in India who would be paid $2500 per year whereas the same job would require a wage of at least $45000 in US.

According to Forrester Research2, the percentage of offshore outsourcing for U.S. IT budgets took a leap from 12 percent in 2000 to 28 percent in 2003. It also says that around 3.3 million U.S. services jobs will move offshore during the next 15 years, led by the IT industry and also estimates that companies can save up to 50% by outsourcing abroad. Coca-Cola, for example, already outsources about 15 percent of its information technology work and plans to do even more to cut costs.

The migration began in the early 1990s when some of the technology sector's heavyweights like Oracle Corp., IBM, Sun Microsystems, Cisco Systems Inc., and...

... middle of paper ...

...pursue offshore outsourcing if it means U.S. jobs ?" InformationWeek.com , 2003, June 6 2003,

< http://www.informationweek.com/story/showArticle.jhtml?articleID=8700190&pgno=1 >

8 Rayen,Ranjeet "Indian outsourcing unscathed by US outcry" CIOL ,2003, May 28 2003,

<http://www.ciol.com/content/news/trends/103030501.asp>

9,13Roberts,Paul Craig "Notes for free traders" Townhall.com , 2003, June 4 2003,

< http://www.townhall.com/columnists/paulcraigroberts/pcr20030305.shtml>

10 Mill,John Stuart "Utilitarianism" Utilitarianism

< http://www.utilitarianism.com/mill1.htm >

11 "John Locke"

< http://www.blupete.com/Literature/Biographies/Philosophy/Locke.htm >

12 THIBODEAU,PATRICK "Outsourcing growth predicted, but impact on workers may be uneven" IDG.Net , 2003, June 8 2003,

< http://www.idg.net/ic_1273426_9735_1-5082.html >

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