You'd think that the deep recession in the IT industry and the tens of thousands of resulting layoffs would satisfy even the most parsimonious of bean counters -- but it hasn't. While unemployed U.S. techies learn to flip burgers, business is booming for India's two largest outsourcing firms -- Tata Consultancy Services and Infosys -- which have just reported their best quarters since the downturn began. Both have also announced they are hiring thousands of workers.
One of the companies helping to funnel cash and jobs across the globe is Microsoft, which recently announced that Infosys will take over a broad swath of its internal IT operations for the next three years. That's right -- the world's largest software company, which has laid off thousands of employees, won't even eat its own dog food, preferring instead to let someone else wrestle with the complexities of Windows Server and Windows 7.
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I certainly don't begrudge Indian workers a job; like us, they want to feed their families and have a decent life. But how will the American economy ever recover if our biggest companies choose to fatten their margins at the expense of the domestic workforce and domestic suppliers?
Infosys preparing to take even more U.S. jobs
Infosys says it will provide Microsoft with IT help desk, desk-side services, and infrastructure and application support from multiple global centers. The Mumbai-based company will manage Microsoft's internal IT services for applications, devices, and databases in 450 locations across 104 countries.
Here's a part of an Infosys press release announcing the deal that is especially telling: "This agreement provides Infosys with a unique opportunity to partner with Microsoft IT and gain deep and early expertise in the implementation and management of the latest Microsoft technologies, and thus enhancing Infosys capabilities to help other customers leverage Microsoft's innovation and adopt these technologies."
Translation: The $100 million deal with Microsoft will help Infosys land even more outsourcing jobs at the expense of U.S. workers. Talk about adding insult to injury -- and Infosys is hardly hurting.
Earlier this month, Infosys made what one Indian publication called "a thumping statement on business recovery by forecasting a 16-18% growth for this financial year, awarded wage hikes of 14% and revealed plans to recruit 30,000 employees."
The only bit of humor in this tale is Microsoft's apparent discomfiture with being outed as an outsourcer. It appears that Infosys was so happy to win the contract it spit out a press release that caught Microsoft off guard.
Microsoft hastened to note that it has been outsourcing its IT services for some time. In a statement to a ZDNet writer, the company said, "This is simply a consolidation of work that used to be provided by multiple vendors to a single provider, Infosys. Microsoft has had a concentrated effort to be more efficient and save money. This was a major area where it could do this. This new contract will not impact internal resources."
I believe that one of the other vendors was Hewlett-Packard. In any case, if it was time to consolidate those services, Microsoft could have given the job to a U.S. firm or even (gasp) handled the job internally. But why think about your own country?
Instead, Microsoft has been lopping off heads. At the end of February, it announced that it had more than made good on its plan from a year ago to eliminate 5,000 positions by the middle of June 2010. Not that I was worried about them, but it's nice to know that departing Microsoft execs are well taken care of: CFO Chris Liddell was given a severance of nearly $2 million when he decided to leave, according to Microsoft's always interesting filings with the Securities and Exchange Commission. How big was your severance?
A little more than a year ago, IBM stunned the tech world by suggesting to its thousands of laid-off workers that they take jobs in India. Microsoft's outsourcing announcement isn't quite that grotesque, but when it comes to taking care of the workforce, it appears that all of our tech giants are about the same.
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