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Summary:

Another sunday, another New York Times story about outsourcing. This time Wipro CEO/Chairman Azim Premji is offering a defense for outsourcing and trying to out-PR the backlash. bq. Wipro’s chairman, has also spent the last few weeks collecting a variety of statistics. In an interview, he […]

Another sunday, another New York Times story about outsourcing. This time Wipro CEO/Chairman Azim Premji is offering a defense for outsourcing and trying to out-PR the backlash.

bq. Wipro’s chairman, has also spent the last few weeks collecting a variety of statistics. In an interview, he rattled off a few of them: India’s technology industry employs 800,000 people, he said, while the American technology industry employs 10.2 million. And 300,000 people work in Indian call centers, compared with six million in the United States. The point, he said, is that Americans are unduly worried. “We are not dealing with cold reasoning here,” he said, “but with emotions of Americans whose personalities changed after 9/11 and who feel threatened by anything that hurts their security, their wealth and their jobs.”

Dude, nobody is listening to what you have to say. A few weeks ago I wrote about the public relations nightmare India was facing in the wake of outsourcing backlash fueled by the media, especially one television anchor, who offers righteous arguments but no solutions. I still stand by that argument that Indians are putting their proverbial foot in the mouth. Premji is the latest. Their PR advisers, and I know who they are (and yes they are American PR agencies) are giving them bad advise. Wipro for instance should simply fire their agency and should shut up!

bq. But he is hardly oblivious to the outsourcing furor. After he closed his recent deal with an American company, he said its executives understandably did not want to crow about the 30 percent cost savings from shipping the work to India. “They said they could handle a leak but did not want to go straight on the Lou Dobbs show,” Mr. Talwar said.

And as for the US politicans, when all this furor dies down …. in other words when the elections are over … I will look back and see what solution each one has offered for this clear and present danger to the American way of life. I think we all need to put collective heads together, and figure out what we are going to do. I don’t think the corporate chieftans have the answers, for they are slaves to the stock market (just like most of us, if you come to think of it.) And politicans, well in the words of Bill Maher, these geniuses are the same folks who decided to raise reward money for OBL to $50 million.

Jeff has a brilliant analysis, and its a must read.

bq. And he’s right, 800K is a small number compared to 10M. But let’s put it into context. Let’s assume that 500K of those jobs are due to the trend (I’m guessing it’s more, but let’s be conservative). That means that 500K technology jobs have been moved from the US job market to India. 500K jobs at an average annual salary of $50K means that our GNP takes a first-order reduction of $25B annually, and our tax intake takes at least a $5B hit, annually. So let’s now imagine that the US auto industry or corn growers were faced with a rapid migration of jobs and revenues to another country, to the tune of $25B annually. Do you think there would be some pressure on Congress?

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  1. Looks like we wrote about the same story. See http://www.nicholsgrp.com/2004/03/21/overreacting_dont_think_so.html.

    I like your take – Wipro should lay low. It’s not their fault, it’s the corporate and government morons in the US who can’t see that short-term gains isn’t an excuse for reducing the US tax base to this extent.

  2. Pervasive Computing News Saturday, March 20, 2004

    Overreacting? Don’t Think So!

    Good article in today’s NYTimes about technology outsourcing, or “offshoring” as it is now euphemistically called. I have to disagree…

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