Novell announced today (October 16th, 2007) that it is laying off 250 software development positions in the United States and offshoring the majority of these to its operations in Bangalore, India. Full stories from the Provo Daily Herald and the Deseret Morning News; supplemental report on KSL Channel 5.
Of the 250 affected, 200 are from its Provo office and the remainder are from Novell's other offices nationwide, according to Kevan Barney, Novell's senior manager of public relations. The layoffs will take effect this week and the affected workers will receive severance pay and outplacement services. After the layoffs, Novell, which has a total of 4,600 workers companywide, will have 1,200 workers in Provo.
The restructuring of Novell's operations, which began in February 2007, is estimated to total between $35 million and $45 million over the course of its 2007 fiscal year. The final restructuring costs will be detailed in the company's fourth quarter and fiscal 2007 earnings report to be released in the coming weeks.
"The most successful tech companies have a mix of onshore and offshore engineering resources," Barney said. "Provo is still the largest single facility for us companywide and worldwide. The skills that our Provo employees bring are significant. Unfortunately, the realities of working in a global market mean these things do happen. To compete in the global markets, we have to do this. It's a pragmatic approach, and necessary to compete." [Ed. Note: In other words, "patriotism" isn't pragmatic, according to this joker.]
In the past few years, many of the jobs going overseas, especially to India, are high-end research and engineering jobs because the talent abroad is not only cheaper, but well-educated. Many of India's top engineers and tech workers are educated at the Indian Institutes of Technology, a group of top technology institutes in India, one of which was set up with the assistance of Massachusetts Institute of Technology.
The Daily Herald article does not explore outsourcing in depth; we turn to an article in PR-GB.com for some insight. Why is it that so many companies outsource outside the United States? The primary advantages include lower personnel costs, allowing the company to focus on more important factors, freeing up space in the company building for other important uses, increased productivity and efficiency, more effective job management, reduction of cash flow, and freeing up management time,
However, there are also disadvantages. These include loss of local jobs, particularly jobs related to customer service and technical fields, loss of direct control over management, quality problems, slow response and resolution times which can lead to frustration and anger from some customers, language barriers (including excessively-accented English), and reduction of product sales because of frustrated customers or people who boycott a company’s products because they outsource.
The problem is that American workers cannot possibly hope to compete with Third World workers in wages; Third World wages aren't merely lower, they're EXPONENTIALLY lower. The wages accepted by Third World workers in their countries simply cannot support a worker in the United States. According to a slide show presented on Forbes.com, an average Indian IT salary is $9,896 per year, according to outsourcing consultancy NeoIT. By contrast, a mid-level IT manager in the U.S. pulls in $65,000 to $125,000 per year, depending on the location. Listen, to qualify for your typical $300,000 single-family home in a given metro area requires a minimum income of around $60,000. Tell me how a guy making less than $10,000 per year can even qualify to rent an apartment, never mind have ANY hope of even aspiring to home ownership. This literally snatches the American dream out of the hands of thousands of American workers every year. Yet, in the words of J.B. Stoner, none dare call it treason.
And jobs are not stolen from Americans only through this type of outsourcing. Jobs are also stolen from Americans through "reverse outsourcing" to foreigners brought to the United States for that purpose. They secure H-1B and L-1 visas. While it is not legal for companies for fire Americans to make room for foreigners inside the United States, the fact is that it is commonly done. There is a complete series of posts on the Alaska Pride blog which describe and define H-1B and L-1, as well as document the accompanying abuses of these programs.
America is being raped and pillaged in so many ways. By illegal aliens, who come here, drive down wages, corrupt neighborhoods, and sponge off our social services. By corporate plutocrats, who not only knowingly hire illegals when possible, but who deliberately export jobs outside the United States and import legal foreigners to take more jobs away from Americans through H-1B and L-1 visa programs. And, finally, by complicit and ignorant politicans looking for votes.
The highest national political priority for Americans in 2008 must be the election of Ron Paul to the Presidency of the United States. However, the next highest priority for residents of Utah's 3rd Congessional District is the REMOVAL of Chris Cannon via the ballot box. Cannon is one of the biggest cheerleaders in the U.S. House for a "path to citizenship" (amnesty) and a guest worker program. Politicians who believe in these principles must be forced to pay a price at the ballot box.