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Jobs in the US in IT development and finance reserved exclusively for India

General Motors Corporation. announced in late November 2005 that it will close 9 of its automobile manufacturing plants in the United States, as well as three related assembly plants, including a location in Canada. Ford Motor Co. followed suit in early December 2005 announcing that it is considering closing up to 8 of its US manufacturing plants, including assembly and engine operations, with one in Mexico. Americans are all too familiar with the downsizing, outsourcing and offshoring of the US manufacturing base, which has lost 2/3 of its jobs in the last 20 years, having been traded for cheap labor. From the third world. And while white-collar workers have barely been immune to the offshoring practices creeping into boardrooms, this week’s indication is that the tide has turned.

Both Intel Corp., the world’s largest computer chip maker, and JP Morgan Chase & Co., one of the world’s largest financial institutions and the second largest in the US, are investing in creating new jobs in India for the next few years. instead of in the US. However, in previous offshoring scenarios, white-collar jobs, such as investment banking, software engineering, and research and development, previously held by US workers, will now also originate in India.

JP Morgan plans to locate 1/3 of its investment banking and support staff in Bangalore, India, by the end of 2007. It will double the number of employees by hiring 4,500 graduates over the next two years. 3,000 of the new hires will work in investment banking and 1,500 will support its retail and commercial banking operations. There are currently 4,500 employees in reception staff positions in Mumbai, India.

With just 200 employees in India just two years ago, to achieve its latest target, JP Morgan will be hiring between 300 and 400 graduates per month for a total of 9,000 front and back office positions by 2008, including complex settlements of derivatives and structured finance transactions. The approximately 4,000-4,500 remaining JP Morgan employees will be split between Bournemouth, England and New York, NY, although the ratio between the two countries was not disclosed.

Similarly, Intel will invest $1.1 billion in India over the next 5 years, with $800 million dedicated specifically to research and development operations and other projects, including chip design, also in Bangalore, according to President Craig Barrett. While Intel will also explore expanding its manufacturing prospects in India, its current investment will largely go into more complex, high-value jobs rather than just help desk and call center jobs, which most companies do. IT companies relocate today.

Other companies following this latest trend include Cisco Systems, the world’s largest Internet equipment maker, which announced in October 2005 that it would invest $1.1 billion in India, tripling its workforce from 1,400 to more than 4,000 in the next few years. three years. It will also have research and development located in Bangalore. And a larger part of the banking industry is likely to soon follow JP Morgan’s lead, such as Goldman Sachs & Co., which may double its staff to 1,500 in Bangalore.

Microsoft Chairman Bill Gates is expected to invest $400 million in Hyderabad, India, where he plans to hire several hundred workers. Gates has been outspoken, with his statement in April 2005 citing that there were not enough US college students majoring in computer science and therefore he wants to expand the H1B Visa program, allowing more workers foreigners to come to the US But critics believe that Gates and other industry executives are not being honest in their assessments, namely India’s strategy of the banking industry that is hiring finance graduates and not science graduates computing in the expansion of its industry.

In fact, consultants like Stefan Spohr of AT Kearney estimate that investment banks could increase their staffing levels in India by as much as 20% in the next few years. Given that wages in India are 70-80% lower than in the US, with total costs around 40% lower than in the US, the offshoring trend will cease. exist. Rather, jobs will now originate from India and bypass the US entirely.

Disputing the fact that there are not enough quality candidates, for example, in the field of computer engineering, is the change in the way American engineers are hired. Candidates are not only competing with their peers, but also with the fear of being replaced by imported foreign workers or workers abroad, even after they have been hired.

Companies are directly contributing to the perceived engineering shortage by requiring an applicant to meet all items on a detailed list of qualifications. The transfer of similar skills is a concept long lost. With roughly 200 responses for each job posting, companies can afford to wait until they find the perfect candidate, as job cuts in tech are up 20% in the last year, according to Challenger, Challenger, Gray & Christmas. The unemployment rate for programmers and computer engineers is higher than the national average, which does not reflect those who remain unemployed in Silicon Valley because they no longer register for unemployment benefits, nor those who were forced to change jobs. race.

According to Veronique Weill, chief operating officer of the investment banking division of JP Morgan, “the quality of the people we hire is extraordinary and their level of loyalty to the company is unbeatable”, referring to the hiring of employees in India. Funny, but that’s what used to be said about American workers. Perhaps the biggest mistake of the American worker was demanding a decent wage for quality work. And others would argue that perhaps it was his expectation that American companies would prefer them to foreign labor. Tragically, greed, under the guise of a global economy, was the mistake, made not by US workers but by US CEOs, and tolerated by the US government. .

Copyright (c) 2005 Diane M. Grassi

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